The Commodity Futures Trading Commission said Monday that it had settled the charges against the supervisor of a Bank of Montreal natural gas trader who cost the bank around 680 million Canadian dollars (about $660 million United States) after the trader was accused of mismarking and misvaluing the bank’s natural gas trading book for years.

Robert Moore had been the executive director for Bank of Montreal’s commodity derivatives group when the trader, David P. Lee, was there. mr. Moore was ordered to pay the government a fine of $150,000. The order also permanently bars mr. Moore from engaging in any conduct in violation of the Commodity Exchange Act as well as any C.F.T.C. regulations concerning any commodity options transaction, the agency said in a statement.

The settlement winds down the nearly three-year investigation into Canadian options trading, culminating in the largest trading loss in the nation’s history. In 2008, mr. Lee pleaded guilty in a new York court to inflating the value of his portfolio and conspiring with the option broker Optionable to hide trading losses from the bank. he was ordered to pay a $500,000 fine and was barred from commodity trading for life. The C.F.T.C. settled its charges with mr. Lee last November.

Mr. Lee, a native of new Jersey, was accused of wanting to conceal the losses from the bank after making wrong-way bets on natural gas prices. he apparently had deceived Bank of Montreal from at least May 2003 and until May 2007. The bank later discovered that mr. Lee’s trading book was overvalued by an aggregate total of $680 million since the beginning of its fiscal year ended on Oct. 31, 2006.

– Cyrus Sanati

Go to November Press Release from the C.F.T.C. »
Go to 2008 Litigation Release from the Securities and Exchange Commission »
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C.F.T.C. Settles Bank of Montreal Trading Case

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