TORONTO, Feb. 28, 2020 /CNW/ - An Ontario judge found BMO Nesbitt Burns Inc., BMO InvestorLine Inc., and BMO Trust Company (collectively "the BMO companies") committed breach of trust and breach of fiduciary duty against a class of approximately 200,000 registered account holders by taking approximately $102.9 million in undisclosed fees. The Court has ordered the BMO companies to disgorge the profits generated on these fees.
The case involves undisclosed fees charged to customers of the BMO companies on currency conversions in registered accounts, such as RRSPs, RESPs, and TFSAs, over a 10-year period.
After almost 14 years of litigation, in January 2020, the Superior Court of Justice heard a summary judgment motion. The Court released its decision today, finding in favour of the Class and ordering disgorgement of profits. The precise amount is to be determined on a reference.
The Class includes individuals resident in Canada who held registered accounts, such as RRSPs, RESPs, and TFSAs, administered by BMO Trust and had a currency conversion performed in their account between June 14, 2001 and September 6, 2011 at BMO InvestorLine, and between October 1, 2002 and September 6, 2011 at Nesbitt Burns.
The Court found that BMO Nesbitt Burns and BMO InvestorLine systematically imposed an undisclosed mark up on the exchange rate they charged on currency conversions in the registered accounts. The Court held that the failure to disclose the markup was a breach of the defendants' own trust agreements and a breach of fiduciary duty.
As the Court said: "It is fundamental to the viability of trust law in general, and banking and investment relationships in particular, that trust and fiduciary duties be taken seriously…"
James R. MacDonald, one of the representative plaintiffs in the case, said of the result: "I see this as a real victory for customers of these BMO companies. These customers include hard working Canadians who were just trying to save for a better life, for their retirement or for their children's education. They trusted these BMO companies with their hard-earned money. The decision is the result of over a decade of work to bring justice to the many people in the Class against these large financial institutions."
The Class is represented by Paliare Roland Rosenberg Rothstein LLP. Odette Soriano, one of the lawyers for the Class, said, "The decision underscores the importance of the BMO companies' trust obligations, and shows the effectiveness of class actions in addressing such systematic breaches. As the judge made clear, financial institutions must take their trust and fiduciary obligations very seriously, particularly in the context of self-payment. They will be held to account if they don't."
Further information about the claim, including a copy of the court's reasons for its decision is available at: https://www.paliareroland.com/practice-areas/details/class-actions/bank-of-montreal-rrsp.
SOURCE Paliare Roland Rosenberg Rothstein LLP
For further information: Please contact Odette Soriano and Jeff Larry at Paliare Roland Rosenberg Rothstein LLP. Ms. Soriano may be reached at 416-646-4306 or [email protected] Mr. Larry may be reached at 416-646-4330 or [email protected]