Kevin Cassidy, the former CEO of commodities brokerage Optionable Inc., pled guilty to criminal charges in 2012 for helping the Bank of Montreal (BMO) conceal as much as C$853 million ($803 million) in commodity trading losses. But is the bank’s four-year old civil suit against Cassidy malicious in nature?

Cassidy believes so, and he has filed to have BMO’s suit dropped permanently in a Manhattan court filing. Cassidy calls the suit malicious because it intended to shift blame away from the bank’s own problems. BMO had already asked the court to drop the case without prejudice, meaning the bank could refile the suit down the road.

In his filing, Cassidy called BMO’s petition to drop the suit “patently absurd.” According to Cassidy, neither the Department of Justice nor the bank have been able to show that Cassidy directly caused any losses for the bank. Cassidy also claims that the bank ignored Optionable’s advice, electing to not change its trading system following a previous $51 million natural gas trading loss in 2001.

BMO announced in April 2007 that the company held C$680 million of pretax commodity-trading losses. Those later losses grew to C$853 million for the fiscal year.

Cassidy’s filing also says that BMO ignored a magistrate judge’s advice in January that the bank should have lawyers ready to answer questions from Cassidy and his legal team. Instead, according to Bloomberg, BMO “chose to fold its tent and go home.”

BMO has not publicly commented on Cassidy’s most recent filing. In its own Nov. 20 filing to have the case dropped without prejudice, however, the bank wrote that the case should be dropped because Cassidy does not have the $8.6 million that BMO seeks in restitution. “Any jury verdict against him in this civil litigation would offer BMO no economic benefit,” the filing said.

According to BMO, the bank has already reached preliminary settlements with a number of other defendants in the case, including Optionable and MF Global Holdings Ltd.’s bankruptcy estate.


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