Canadian Retirement Investor Sues over Currency Conversion

August 9, 2006 ( - A Canadian retirement investor has hit the Bank of Montreal with a lawsuit claiming he was charged unnecessary fees to cover currency conversions.

Plaintiff James MacDonald leveled the charge against Bank of Montreal in a suit filed in Ontario Superior Court that seeks class action status, according to a Bloomberg news report. Bank of Montreal is Canada’s fourth-biggest bank by assets.

The suit seeks at least $98 million for all investors in Registered Retirement Savings Accounts – the Canadian version of 401(k) accounts, the news report said. The plaintiff also wants to bar the bank from charging undisclosed fees on any foreign exchange transactions.

The suit, filed August 2, challenged the bank’s practice of charging foreign exchange fees on stock trades in the accounts. The news report said that MacDonald claimed he was charged a fee when he bought Tyco International Ltd. shares in US currency in 2003. He was billed a second time when he sold the shares two months later after the proceeds were converted back to Canadian dollars, the lawsuit said, according to Bloomberg.

“The foreign exchange fee is not and has never been disclosed to MacDonald and the other class members,” his lawyers said in the complaint. “The foreign exchange fee is and was intentionally hidden and kept secret from the class members, in breach of the defendants’ contractual and fiduciary duties.”

The case is Between James Richard MacDonald and BMO Trust Co., Ontario Superior Court of Justice (Toronto), Case No.: 06- CV-316213CF.