Bank says it didn't know about customer Robert Allen Stanford's fraud
TD Bank will defend itself in a trial starting in Ontario today as liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford seek CAD$7 billion in damages, according to a report by Thomson Reuters.
The joint liquidators of Stanford International Bank (SIB) allege "negligence and knowing assistance" by TD in allowing SIB to maintain correspondent accounts, according to a statement filed with the Ontario Superior Court of Justice in 2019.
Stanford is serving a 110-year prison term after being convicted in 2012 of running a $9.2-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 spokesperson said, according to a report by CBC. "TD is not responsible for the fraud committed by Allen Stanford."
The plaintiffs allege that SIB's "exponential" growth from 2002 to late 2008 made it TD's largest correspondent banking customer and a significant source of revenue. TD Bank denies these claims.
They are also seeking a full accounting of the revenue and profit from TD's dealings with SIB and a return of those funds to Stanford's investors. 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.
The trial is scheduled to last three months.
