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Thomas Petters was found guilty in 2009 of orchestrating a $3.65
billion Ponzi scheme and sentenced to 50 years in prison.
The lawsuit in Minnesota sought to recoup nearly $2 billion
based on sums Petters transferred from an account at Marshall &
Ilsley Bank, which BMO bought in 2011.
The sums became unavailable for repayment to creditors when the
fraud was uncovered in 2008, a trustee said in the lawsuit.
The jury ruled the BMO unit "aided and abetted" Petters in the
breach of fiduciary duty to his firm, Petters Company Inc (PCI),
causing harm to PCI. Fiduciary duty involves action taken in the
best interest of another person or entity.
"BMO knew Petters' fraudulent conduct constituted a breach of
fiduciary duty to PCI and substantially assisted or encouraged
Petters to commit the breach," the ruling read.
The jury did not find the BMO unit directly aided the fraud.
The unit said it would contest the jury's verdict and award.
"We are disappointed with the jury's verdict, which is not
supported by the evidence or the law," a spokesperson for the
unit said in a statement.
BMO said the C$1.12 billion provision includes an after-tax
charge of C$830 million that it will book in the fourth quarter.
($1 = 1.3426 Canadian dollars)
(Reporting by Shubham Kalia and Shivani Tanna in Bengaluru;
Editing by Jacqueline Wong and Christopher Cushing)
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