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by Mike Caswell

The B.C. Securities and Exchange Commission has handed out a reprimand to the Bank of Montreal for facilitating improper share transfers at small venture issuers. The BCSC says that supervision failures in BMO's transfer agency business allowed public company directors to hide their holdings through nominees. The infractions occurred over a four-year period and involved six companies, according to the BCSC.

The penalty for BMO (or lack of) is contained in a settlement agreement that the BCSC released on Wednesday, July 20. The sanction stems from improper use of the stamps used on securities transfer forms. The stamps (also known as medallions) guarantee the signature on the forms used to move stock from one shareholder to another. The stamps certify that a transfer agency employee has verified the identifies of those involved in the share transfer.

The problem at BMO, as described in Wednesday's settlement, arose from an employee who misused the stamps. The BCSC has not identified that employee, only saying that he worked at BMO's main branch at 595 Burrard St. in Vancouver and had been with the bank for over 50 years. He has since retired.

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