Former BMO commodities supervisor settles CFTC gas trading charge

Robert Moore, former executive manager of the Bank of Montreal’s commodity derivatives group, agreed to pay a $150,000 fine to settle charges relating to the mismarking and misvaluing of a natural gas options book by a trader he supervised, the US Commodity Futures Trading Commission said on Mar. 8.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Mar. 9 -- Robert Moore, former executive manager of the Bank of Montreal’s commodity derivatives group, agreed to pay a $150,000 fine to settle charges relating to the mismarking and misvaluing of a natural gas options book by a trader he supervised, the US Commodity Futures Trading Commission said on Mar. 8.

CFTC said an order by Judge George B. Daniels of federal district court for New York’s southern district stemmed from a Nov. 18, 2008, complaint charging the trader, David P. Lee, with mismarking his gas options positions from May 2003 to May 2007, and with misvaluing other gas options positions from October 2006 to May 2007.

Lee and other brokers also deceived Bank of Montreal by fabricating purportedly independent broker quotes for delivery to the bank’s back office for price and skew verification, according to the CFTC. It said that the conduct violated antifraud and false reporting provisions of the federal Commodities Exchange Act and CFTC regulations.

As Lee’s direct supervisor, Moore was charged with controlling person liability for the trader’s violations, the commission said. Lee settled charges against him in November 2009, it noted. Litigation continues against remaining defendants in the action, it indicated.

Contact Nick Snow at nicks@pennwell.com.

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