On Monday, a settlement was announced by TD Bank Group regarding the bank’s alleged role in former Texas financier Allen Stanford’s $7.2 billion Ponzi scheme. The bank will now pay $1.21 billion, as per the stipulations of the settlement.
The bank shared in a statement that under the terms of the agreement, the settlement will release TD from all legal claims involving the scheme.
TD also says that it is not liable for and did no wrongdoing with respect to the scheme, as an admission of guilt was not included in the settlement and the bank maintains its innocence.
The scheme in question saw Stanford steal from his customers’ investments made through his firm. All of their money was supposed to be put in high-yielding certificates of deposit held in offshore accounts.
A federal investigation that concluded with his conviction in 2012 discovered he used the money he was stealing from his clients investments to fund his lavish lifestyle.
Sanford has since been sentenced to 110 years in prison for the scheme, which came crashing down when the SEC and FBI began investigating his firm in 2009.
According to the Toronto-based bank, it has been facing litigation that accused it of negligence while acting as a banking intermediary for Stanford.
“TD provided primarily correspondent banking services to Stanford International Bank Limited and maintains that it acted properly at all times,” it said in a statement. “TD elected to settle the matter to avoid the distraction and uncertainty of continuing a long legal proceeding.”
The money from the settlement will now go to the receiver in the case, Ralph Janvey, who has recovered more than $2.7 billion for Stanford’s investors and victims, Reuters reported.
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