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Toronto-Dominion Bank has agreed to pay US $1.2 Billion to settle an investor lawsuit which claims that the bank aided and abetted a $7 billion Ponzi scheme 14 years ago.
TD bank, along with other institutions like HSBC Holdings Plc and Independent Bank Group Inc. has been alleged to ignore several “red-flag indications of money laundering” for years.
According to Kevin Sadler, the lead attorney of the receiver and investors, “The indications included large, round-dollar, high-velocity, in and out layering transactions, with no apparent connection to any investing that Stanford claimed he was doing.”
While settlements were also reached with other firms, as mentioned by the investors, TD has the largest share in the payment since it played an “outsized role” in the Stanford transactions.
“Evidence at trial would’ve shown that TD took in almost $7 billion in CD purchase money from investors, far more than any other bank,” Sadler stated.
According to the source, the settlements were reached on February 27 when the three firms were slated for trial in Houston. R. Allen Stanford is currently on a 110-year sentence under high-security captivity in Florida, after being convicted of money laundering and financial fraud in 2012 for a massive Ponzi scheme.
The settlements, described by the attorney as “nothing short of a monumental recovery,” will witness Stanford investors recover around $1.6 billion.
Toronto-Dominion Bank maintained that it does not have “any liability or wrongdoing concerning the multi-year Ponzi scheme operated by Stanford.”
The bank mentioned that its interactions with Stanford were limited to providing “primarily correspondent banking services,” adding that “it acted properly at all times.”
The bank said it “elected to settle the matter to avoid the distraction and uncertainty of continuing a long legal proceeding.”