News Release

Vancouver – The B.C. Securities Commission has reached a settlement with a Canadian chartered bank that violated BCSC freeze orders on monies being held on deposit in a Vancouver branch.

The Commission had issued four freeze orders in 2000 against a number of parties including the Bank of Montreal. The orders required the Bank of Montreal to hold any funds on deposit in the name of Exchange Bank and Trust, an account which had been opened in 1997.

In an agreed statement of fact, the Bank of Montreal said it opened a new second account in the name of Exchange Bank and Trust and transferred into it interest already paid into the frozen account. The transaction was undertaken so that the bank could recover what it said were operating expenses totalling $91,985 US during the period between April 2000 and March 2003.

Commission staff said they repeatedly asked the Bank of Montreal to stop deducting expenses and to replace the funds it had withdrawn from the account. Staff maintained the bank had violated the freeze orders by not paying the interest earned by the original account into that account and by removing funds from the second account.

The Bank of Montreal said it had acted on the advice of its legal counsel and at no time had it intended to breach the freeze orders.

As part of the settlement, the Bank of Montreal agreed to replace all the funds it had withdrawn during the freeze order period and to transfer all funds from the second bank account back to the original account. In addition, the bank waived the right to a hearing, review or appeal the settlement.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province. Copies of the settlement and related notices can be viewed in the documents database of the commission’s website www.bcsc.bc.ca or by contacting Media Relations Officer Andrew Poon at (604) 899-6880.