The Commodity Futures Trading Commission has fined an option broker $1 million for his role in a scheme that allowed a former trader at the Bank of Montreal to defraud the bank of $680 million Canadian. Kevin Cassidy was the chief executive officer of Optionable, Inc. at the time that David Lee mismarked and mis-valued the value of the bank's natural gas options book. Between 2003 and April 2007, which was the height of the scheme, the CFTC said Lee's actions cost the bank $660 million. Optionable received over $6.9 million in commissions on natural gas trades, according to the CFTC. The scheme is regarded as the largest trading loss in Canada's history. The CFTC said Lee and various options brokers deceived BMO by fabricating "independent broker quotes" that were delivered to BMO’s back office. Before BMO could perform its month-end verification process, Lee created false bid/offer quotes for the natural gas option positions that the back office used to check the value
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