Hunger Strike – Day Six

Just because the blogging hunger strike persists (see prior post “Hunger Strike – Day One” June 16-10), that doesn’t mean we can’t regale you with stories of earlier experiences with media ethics: Our June 16, 2008 “Water torture at the hands of the U.S. Attorney” blog:

Tucked away in an unremarkable Friday afternoon Bloomberg story about MF Global was more than a few nuggets about the snail-paced water torture that the U.S. Attorney is putting Bank of Montreal (BMO:TSX, NYSE) through:

The company today disclosed two investigations into natural- gas trades it helped facilitate. The U.S. Attorney’s Office in New York is probing over-the-counter gas trades of a customer, the Bank of Montreal. In addition, the Commodity Futures Trading Commission sent a so-called Wells notice in May, saying it may recommend legal action over two natural-gas trades in 2004, according to MF Global’s regulatory filing.

The natural-gas trades related to Bank of Montreal are also being investigated by a New York County grand jury. An unnamed BMO trader, using a broker at MF Global, “allegedly mismarked his book,’’ MF Global said, meaning he entered incorrect or false trade data.

The Bank of Montreal last year lost $618 million in natural- gas trades, the largest loss ever by a Canadian bank. The bank said last May it had “increased concerns’’ about the reliability of quotes from its main broker, Optionable Inc. After increasing the size of its loss, BMO said it was investigating “whether any potential irregularities in trading and valuation took place,’’ according to a May 17, 2007 statement.

The CFTC and the U.S. Securities and Exchange Commission are also involved in the investigation, MF Global said. Neither MF Global nor its broker have been named as targets of the probe, the company said.

This is an excerpt from the June 19, 2008 edition of The Globe and Mail. Three days later, if you can believe it:

U.S. futures brokerage probed over BMO trades

One of the world’s biggest futures and options brokers has been swept up in an investigation that is focused on trades at the Bank of Montreal, demonstrating that the saga stemming from BMO’s energy trading losses is not over yet.

Bermuda-based MF Global Ltd., whose main office is in New York, has disclosed in filings with regulators that it has been co-operating in an investigation that “centers around trading by a market making energy trader at Bank of Montreal who allegedly mismarked his book.”

The investigation is being carried out by a grand jury in New York in conjunction with the U.S. Attorney’s Office there, and both the Commodity Futures Trading Commission (CFTC) and U.S. Securities and Exchange Commission (SEC) are involved, MF Global said.

Nothing in the Globe’s piece advanced the original Bloomberg story; and, one has to ask, when was the last time they ran with a Bloomberg piece three days after it was filed? Despite the passange of time, no new reporting was done by the Globe in the interim. And the point that BMO wasn’t yet out of the woods with the U.S. Attorney had, ahem, already been the focus of our June 16-08 post.

As with Mr. Milstead and Mr. El Akkad, they would have you believe that this is all just a coincidence, of course.

MRM
(disclosure: Time Magazine ran one of my CP wirephotos in 1982 — in colour no less; I think my Stringer fee was $75 for that one shot. A very happy day for sure.)