FMF Investors Files Lawsuit Against Bank of Montreal
A lawsuit was filed yesterday in a Michigan court, accusing Bank of Montreal’s investment banking unit and a U.S. subsidiary, Harris Nesbitt Corp., of conspiring with FMF management to perpetrate a fraud during the marketing of the $197-million initial public offering.
The suit was filed by investors in FMF Capital Group Ltd., which is a U.S. mortgage company that was spun into a trust and listed on the Toronto Stock Exchange in March.
Investors were promised an initial yield of 11 per cent, but FMF shocked the market last month when it said it would suspend distributions. BMO Nesbitt was the lead underwriter.
Three FMF executives, who held just over 90 per cent of the company, sold the majority of their stake in the IPO. Chief executive officer Robert Pilcowitz, chief financial officer Howard Morof and chief operating officer Edan King are named as defendants.
Five other Bay Street firms — National Bank Financial Inc., TD Securities Inc., Canaccord Capital Corp., Blackmont Capital Inc. and Sprott Securities Inc. — are named as defendants. All were part of FMF’s underwriting syndicate.
It was accused that FMF covered up key risks in its business, including the fact that the company could be stuck with mortgages it didn’t want, and that BMO failed to properly investigate it before it agreed to handle the deal.
Filed under Class Action, General Law
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January 31st, 2006 at 1:16 pm
Hi my name is Rennie, i am sorry but i don’t have a comment at this time but please tell me if you can help me.
A bank had a matter against me which I then presented my cast and requested an investigation, they found that they had an unlawful case against me release the judgment in September 13th 2005. this judgment was over 15 years and I suffered grate damages by their actions, I need to get compensation before it’s to late can you help me?.
February 2nd, 2006 at 1:17 am
You can consult with any lawyer at your place about compensation. In my previous articles I have already published name and informations of lawyers in USA.