TD Bank sued for $5,5bn in Ponzi scheme scandal

Photo: EPA Allen Stanford

Toronto-Dominion Bank will have to stand trial and face charges linked to the bank’s ignorant behavior which resulted in billions of dollars damages amid the operations of a Ponzi scheme set by the Texas financier Robert Stanford, Reuters reported.

The liquidators of the collapsed Antigua Stanford International Bank (SIB bank have pressed charges amounting at 5,5 billion dollars against the Toronto bank. The allegations point “negligence and knowing assistance” by TD, Canada’s second-biggest lender, in allowing SIB to maintain correspondent accounts, according to a statement filed with the Ontario Superior Court.

Correspondent banking is the business of providing services to offshore financial institutions. The joint liquidators are Grant Thornton in the British Virgin Islands and the Cayman Islands. The trial is scheduled to last three months, a spokesman for one of the plaintiffs’ lawyers said. Stanford is serving a 110-year prison term after being convicted in 2012 of running a $7.2 billion Ponzi scheme. “Like everyone else, during the time that Stanford International Bank was a customer of TD, we had no knowledge of, and no reason to suspect, any fraudulent activity was taking place,” a TD spokesman said. “TD is not responsible for the fraud committed by Allen Stanford.” TD estimated reasonably possible losses from legal and regulatory actions including the Stanford litigation of between zero and $750 million.

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