(Bloomberg) -Toronto-Dominion Bank denied knowing about illegal activity in the accounts of convicted fraudster Allen Stanford and said it shouldn’t be held liable for a $4.5 billion negligence claim made by trustees trying to recover losses for Stanford investors. At a civil trial in Toronto. “TD is not responsible for the fraud committed by Allen Stanford.” In earlier court filings, the plaintiffs had sought damages of US$5.5 billion. The trial is scheduled to last three months, a spokesman for one of the plaintiffs’ lawyers said. Toronto-Dominion Bank will defend itself in a trial starting in a Canadian court on Monday in which liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford are seeking $5.5 billion in damages. The joint liquidators of Stanford International Bank (SIB) allege 'negligence and knowing assistance' by TD, Canada's second-biggest lender, in allowing SIB to maintain. TD Bank faces Stanford Ponzi scheme liquidators seeking $4.5 bln in trial Back to video Stanford is serving a 110-year prison term after being convicted in 2012 of running a $7.2 billion Ponzi scheme.
Toronto-Dominion Bank will defend itself in a trial starting in a Canadian court on Monday in which liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford are seeking $5.5 billion in damages.
The joint liquidators of Stanford International Bank (SIB) allege “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 of Justice in 2019.
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 C$951 million ($750 million) as of Oct. 31. Provisions related to legal action will be taken when a loss becomes probable and an amount can be reliably estimated, it said in its 2020 annual report here.
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TD Bank should be held liable for more than $5.7 billion Cdn of losses at the collapsed Antigua bank of former Texas financier Robert Allen Stanford, lawyers for its liquidators argued in an Ontario court on Monday.
The joint liquidators of Stanford International Bank (SIB) allege '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 of Justice in 2019.
In earlier court filings, the plaintiffs had sought damages of $7 billion.
Stanford is serving a 110-year prison term after being convicted in 2012 of running a $9.2-billion Ponzi scheme.
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 plaintiffs allege that TD knew of the 'extraordinary risks' from providing the services and that the bank was
therefore 'reckless.'
'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 spokesperson said. 'TD is not responsible for the fraud committed by Allen Stanford.'
The trial is scheduled to last three months, a spokesperson for one of the plaintiffs' lawyers said.
'If there was evidence sufficient to warrant criminal prosecution, TD would have been charged years ago,' said James Shanahan, an analyst at Edward Jones. 'A judgment or settlement of [more than] $500 million [US] would surprise the market.'
TD estimated reasonably possible losses from legal and regulatory actions including the Stanford litigation of between zero and $951 million Cdn as of Oct. 31. Provisions related to legal action will be taken when a loss becomes probable and an amount can be reliably estimated, it said in its 2020 annual report.
TD shares rose 0.3 per cent in Toronto on Monday in a generally down market.
In November, a Swiss court ordered Societe Generale SA to surrender $190 million deposited by Stanford, saying it had failed to do proper due diligence.