Former Bank Trader Runs Out Of Gas, And Pays A $500,000 Penalty

About a year ago, the Commodity Futures Trading Commission filed a complaint that charged David P. Lee, a former trader for the Bank of Montreal (BMO), with unlawfully mis-marking his natural gas options positions between at least May 2003 and May 2007 and with mis-valuing other natural gas options positions from October 2006 until May 2007. The CFTC’s complaint further charged that Lee and various brokers deceived BMO by fabricating purportedly independent broker quotes delivered to BMO’s back office for price verification.

Today, Lee settled the charges against him. Judge George B. Daniels of the U.S. District Court for the Southern District of New York entered requiring Lee to pay a $500,000 civil monetary penalty. The order also permanently bans Lee from any commodity-related trading.
 
The case against other defendants continues, but one has to wonder how much gas they have left in the tank to fight….