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TD Bank faces Ponzi Plan liquidators seeking $ 5.5 billion lawsuit



(Reuters) – Toronto-Dominion Bank will defend itself in a lawsuit pending in a Canadian court on Monday, in which liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford demand $ 5.5 billion in damages.

joint liquidators for Stanford International Bank claim "negligence and knowledge of assistance" by TD, Canada's second largest lender, to allow SIB to maintain correspondent accounts, according to a statement filed with the Ontario Superior Court of Justice in 2019.

Correspondent Bank is the business of providing services to offshore financial institutions. The common 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 plaintiff's lawyers said.

Mr. Stanford is serving 1

10 years in prison after being sentenced to 2012 for operating a $ 7.2 billion Ponzi scheme.

"Like everyone else, we had no knowledge of and during the time that Stanford International Bank was a customer of TD, and no reason to suspect, any fraudulent activity took place," said a TD spokesman. "TD is not responsible for any fraud committed by Allen Stanford."

TD reasonably estimated possible losses from legal and regulatory action including Stanford disputes of between $ zero and $ 951 million ($ 750 million) as of October 31. legal action will be taken when a loss becomes probable and an amount can be calculated reliably, it was stated in its annual report for 2020.

The complainants claim that SIB's "exponential" growth from 2002 to the end of 2008 made it TD's largest correspondent bank. customer and a significant source of income, claims the Canadian bank has denied.

They are also seeking a full account of the revenue and profits from TD's business with SIB and the return on these funds to Stanford's investors.

In November, a Swiss court ordered Societe Generale SA to hand over $ 150 million deposited by Stanford, saying it had not done proper due diligence.

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