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Related Documents Industry Document "New York Court Imposes $500,000 Fine and Other Sanctions Against David P. Lee, Former Natural Gas Trader for Bank of Montreal" presented on 11/6/2009

Related Articles 11/18/2008 SEC charges former Bank of Montreal trader, ex-Optionable CEO 5/2/2007 Bank of Montreal to dismiss two officials over money-losing gas trades

The Commodity Futures Trading Commission has entered into a consent order settling charges brought against David Lee, a former trader for the Bank of Montreal, for allegedly mismarking and misvaluing the bank's natural gas options book and allegedly deceiving the bank, the agency said Nov. 6.

Judge George Daniels of the U.S. District Court for the Southern District of New York entered an order Nov. 5 requiring Lee to pay a $500,000 civil monetary penalty. The order also permanently bans Lee from any commodity-related trading.

The order stems from a CFTC complaint, filed Nov. 18, 2008, that charged Lee with unlawfully mismarking his natural gas options positions between at least May 2003 and May 2007 and with misvaluing other natural gas options positions from October 2006 until May 2007. The complaint also charged that Lee and various brokers deceived Bank of Montreal by fabricating purportedly independent broker quotes delivered to the bank's back office for price verification.

The CFTC said the order found that Lee's alleged conduct violated antifraud and false reporting provisions of the Commodity Exchange Act and CFTC regulations. The CFTC's litigation against other named defendants in the case continues, the agency said.