In 2009, a federal jury found businessman Thomas Petters guilty of orchestrating a $3.65 billion Ponzi scheme and he was sentenced to 50 years in prison.
The Minnesota lawsuit aimed to recover nearly $2 billion in damages based on money Petters transferred from an account at Marshall & Ilsley Bank, which the Bank of Montreal bought in 2011 and for which it held the took responsibility.
Those funds were no longer available to creditors when the fraud was discovered in 2008, a trustee said in a court case.
The jury upheld the charge against the bank, which alleged that the banking entity “materially aided or abetted” businessman Petters in committing the violation.
The Canadian bank said it will appeal the verdict to challenge the verdict and the jury’s sentence.
“We are owed the jury’s verdict, which is not supported by evidence or the law,” a spokesman for the banking unit said in a statement.
As part of the accrual, Bank of Montreal announced that it will record an after-tax charge of $830 million in the fourth quarter.
($1 = 1.3426 Canadian Dollars)
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