TD Bank’s $1.2 billion Ponzi settlement
Toronto-Dominion Bank, better known as TD Bank (NYSE: TD) settled to pay $1.2 billion for its role in the Allen Stanford Ponzi Scheme which amounted to $7 billion. TD will pay substantially larger than its cohorts, which according to Ralph S. Janvey (the court-designated receiver) is due to the significant role TD played in wire transfers tied to Stanford’s Ponzi scheme. Société Générale‘s $157 million, Trustmark‘s $100 million, Independent Bank‘s (previously known as Bank of Houston) $100 million, and HSBC Holdings‘ (NYSE: HSBC) $40 million settlement are much smaller in comparison. Prior to settlement, it was speculated Janvey would seek combined damages totaling $4 to $10 billion from TD, Independent Bank, and HSBC.
TD Bank released a statement regarding the settlement:
As has been the case throughout these proceedings, TD expressly denies any liability or wrongdoing with respect to the multi-year Ponzi scheme operated by Stanford and makes no admission in connection to any Stanford matter as part of the settlement. TD provided primarily correspondent banking services to Stanford International Bank Limited and maintains that it acted properly at all times. TD elected to settle the matter to avoid the distraction and uncertainty of continuing a long legal proceeding. TD previously had a trial in Canada regarding the same Stanford matter, and the trial court ruled entirely in TD’s favor and found no liability. The Ontario Court of Appeal affirmed, and there is now an application for leave to appeal pending in the Supreme Court of Canada.
The settlement avoided a possibly month and a half long trial, and final approval should take place in the U.S. Northern District of Texas during the summer.
The prosecutor during Stanford’s criminal trial, Gregg Costa was quoted by the Houston Chronicle as saying “It is incredibly sad and frustrating and disappointing how long it has taken this case to get to trial”.
TD Bank statement regarding Stanford Financial Group Settlement: click here