The Ontario Securities Commission will hold a hearing on November 10 to consider a settlement with BMO Nesbitt Burns Inc., concerning allegations of inadequate due diligence in an IPO underwriting, the OSC said Monday.

The commission is alleging that as lead underwriter for the initial public offering of FMF Capital Group Ltd. in 2005, the firm “engaged in conduct contrary to the public interest” by conducting due diligence on the IPO “in a manner that did not comply with reasonable underwriting practices.”

FMF, a U.S. mortgage lender, went public on the Toronto Stock Exchange in March 2005 in a $197.5-million IPO. Later that year it began reporting losses and suspended distributions. It was delisted from the TSX in April 2007.

The allegations have not been proven, and the terms of the settlement will only be disclosed if the commission approves the deal.

IE