TD Bank trial in $4.5 billion Stanford Ponzi scheme lawsuit ends
TORONTO - The three-month trial of a lawsuit against Toronto-Dominion Bank, in which the liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford are seeking $4.5 billion in damages is expected to end on Wednesday.
A written judgment from the court is expected in a few
months.
In closing arguments at the Ontario Superior Court this
week, lawyers for the court-appointed joint liquidators of Stanford
International Bank (SIB) alleged negligence and "knowing assistance"
by TD in providing a correspondent banking account that Stanford used to
perpetuate fraud.
TD's lawyers said the bank did not know about the fraud, and
that damages should be limited to the estimated $5 million in profit from its
relationship with SIB.
Stanford is serving a 110-year prison term in the United
States after being convicted in 2012 of running a $7.2 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 alleged that TD was aware of possible risks
of providing the services and that the bank was "willfully blind, reckless
and, at a bare minimum, negligent."
They argued that even after reports of Stanford's conduct
came to light, TD did not terminate the services.
TD said media reports about Stanford were not easily
accessible and that a U.S. government warning about criminal activity in
Antigua's financial sector mentioned by the plaintiffs did not explicitly
mention Stanford.
TD estimated reasonably possible losses from legal and
regulatory actions including the Stanford litigation of as much as C$1.4
billion ($1.13 billion) as of Jan. 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.
The joint liquidators are also seeking $510 million from
Societe Generale SA, after a Swiss court ordered the bank to surrender $150
million deposited by Stanford.
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