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BMLP - Dorsey Wright MLP Index ETN Due 10 Dec 2036 News Story

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UPDATE 1-Bank of Montreal pays $38 mln to settle U.S. SEC charges it hid conflicts

(Adds details, comments, bylines)
    By Jonathan Stempel and Nichola Saminather
    Sept 27 (Reuters) - Two units of Bank of Montreal  BMO.TO 
agreed to pay about $38 million to settle U.S. regulatory
charges they concealed conflicts of interests by failing to tell
clients their money was often being invested in expensive,
in-house funds.
    The U.S. Securities and Exchange Commission on Friday said
BMO Harris Financial Advisors and BMO Asset Management, both
based in Chicago, will pay an $8.25 million civil fine plus
$29.73 million of disgorgement and interest, with money used to
compensate harmed investors.
    "BMO advisers repeatedly put their own financial interests
ahead of clients," C. Dabney O'Riordan, co-chief of the SEC
enforcement division's asset management unit, said in a
    A spokeswoman for BMO said the bank was pleased to settle,
and has improved its processes to identify, address and disclose
conflicts of interest. The company did not admit or deny
wrongdoing in agreeing to settle.
    The SEC has long focused on conflicts of interest when
financial advisers select mutual funds for clients, and brought
many cases over alleged failures to disclose those conflicts.
    According to the SEC, the BMO units failed to disclose that
from July 2012 to March 2016, they invested about 50% of client
assets in their retail Managed Asset Allocation Program in
proprietary mutual funds.
    The regulator said this resulted in higher management fees
for BMO Asset Management, which managed the funds.
    It also said BMO Harris Financial Advisors would invest
client assets from the program in higher-cost share classes,
when they were eligible for lower-cost share classes.
    The program had $2.7 billion of assets under management as
of March 31, 2016, of which $1.4 billion were in proprietary
funds, the SEC said.

 (Reporting by Jonathan Stempel in New York and Nichola
Saminather in Toronto; Editing by Leslie Adler and Sandra Maler)
 ((; +1 646 223 6317; Reuters
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