The news: Chicago-based BMO Harris Bank, which could potentially pay billions of dollars in fines for its alleged involvement in a Ponzi scheme, now also faces accusations of destroying incriminating evidence, per American Banker.
More on this: The US arm of Canadian-based BMO Financial is scheduled to go to court in October regarding its alleged involvement and facilitation of a Ponzi scheme between 1994 and 2008. This week, it lost a pretrial ruling in which a judge found the bank guilty of destroying evidence that it knew would be harmful to its defense.
BMO Harris has said it disagrees with the ruling and will continue to defend itself throughout litigation. If the bank loses the trial, it faces up to $1.9 billion in fines.
Bad timing: The timing of the ruling is unfortunate for BMO Harris, as it’s currently working toward approval of its acquisition of San Francisco-based Bank of the West. The proposed $16.3 billion deal would give BMO Harris significant penetration across the US west coast.
Canadian merger mess: Bad news keeps rolling in for Canadian banks that are trying to grow their technology and customer base and gain traction in the US market. The BMO Harris-Bank of the West deal, which has been in the works since December 2021, is not the only merger that could be in trouble.
Our take: Canadian banks’ planned acquisitions are already up against big hurdles in the US.
But the Canadian banks are making it even harder on themselves as numerous scandals and accusations keep coming to light. Given these difficulties, they might be better off focusing instead on some of the technological changes set to take off in their home country which we’ve highlighted in our report, The Era of Uncertainty: Canadian Banks, like open banking and omnichannel personalization.