Aug. 9, 2006 (Bloomberg) -- Bank of Montreal, Canada's fourth- biggest bank by assets, was sued by a retirement plan investor claiming he was charged fees on unnecessary currency conversions.

The proposed class action, filed by Ontario resident James MacDonald in Ontario Superior Court, seeks at least C$110 million ($98 million) for all investors in Registered Retirement Savings Accounts, the Canadian version of 401k accounts, the Toronto law firm Paliare Roland Rosenberg Rothstein said today in a statement. The plaintiff also wants to bar the bank from charging undisclosed fees on any foreign exchange transactions.

The complaint, filed Aug. 2, challenged the bank's practice of charging foreign exchange fees on stock trades in the accounts. MacDonald claimed he was charged a fee when he bought Tyco International Ltd. shares in U.S. 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 complaint said.

``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.''

Spokeswoman Joanne Hayes said in an e-mailed statement that Bank of Montreal will defend the suit. It has 20 days to file a statement of defense.

Visa, MasterCard Claims

Last month, Visa International Inc., MasterCard Inc. and banks including Citigroup Inc. said they agreed to pay $336 million to their customers to settle antitrust lawsuits over currency conversion fees charged on foreign transactions.

MasterCard said it will pay $72.5 million as its share of the settlement. Bank of America Corp., JPMorgan Chase & Co's Bank One Corp. and Chase Manhattan Bank and Washington Mutual Inc. are also defendants in the case.

The suits involved claims the credit card companies failed to disclose fees of up to three percent on purchases made in foreign currencies, said Merrill Davidoff, a lawyer for the consumers.

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


To contact the reporter on this story:
Joe Schneider in Toronto at jschneider5@bloomberg.net