Kevin Cassidy, the former CEO of commodities brokerage Optionable Inc., will spend two-and-a-half years behind bars for his role in a fraud scheme involving the Bank of Montreal, commonly known as BMO Financial Group.
In 2008, prosecutors accused Cassidy of helping David Lee, a former senior commodities trader at BMO, inflate the value of the bank’s natural-gas trading portfolio from 2004 to 2007. By 2007, the scheme generated more than 40 percent of Optionable’s revenue.
The fraud scam came to light in 2007, when BMO announced that its commodities trading business had lost $853 million, which reduced profits by $440 million. Lee pleaded guilty to criminal charges in 2008 and is still awaiting sentencing. Cassidy pleaded guilty last August to one count of conspiracy to commit wire fraud.
U.S. District Judge Thomas Griesa sentenced Cassidy yesterday to 30 months in prison, followed by three years of supervised release. Cassidy also must forfeit $200,000.