The U.S. Commodity Futures Trading Commission said Monday that it has reached a settlement deal with Robert Moore, a former executive managing director in BMO's commodity derivatives business, relating to the mis-marking and mis-valuing of the bank's natural gas options book by a trader he supervised.
A federal court order in the southern district of New York requires Mr. Moore, a Connecticut resident, to pay a $150,000 (U.S.) fine within 10 days, and bars him permanently from "engaging in any conduct in violation of the Commodity Exchange Act."
This comes after the CFTC charged former BMO trader David Lee with mis-marking his natural gas options positions for a number of years. Mr. Moore was Mr. Lee's direct supervisor at BMO, and as such, was charged with controlling-person liability. (Mr. Lee pleaded guilty and settled in November.) Regulators said Mr. Moore failed to adequately supervise Mr. Lee, and was in a position where he could have discovered the problem sooner had he asked more questions.
Mr. Moore neither admitted nor denied the allegations against him in his settlement.
Issues in BMO's natural gas book eventually cost the bank more than $850-million (Canadian) in losses.