Toronto-Dominion Found Not Liable in Allen Stanford Fraud Trial
10 Jun 2021

Toronto-Dominion Bank was found not liable for losses related to convicted fraudster Allen Stanford’s Ponzi scheme, with an Ontario judge rejecting a $4.5 billion negligence claim against the firm.

The lender doesn’t need to pay the claim filed by trustees trying to recover losses from Stanford investors because Toronto-Dominion “did not know or have any reason to suspect that he was engaged in fraudulent behavior,” Ontario Superior Court Justice Barbara Conway said in a ruling dated Tuesday.

The ruling closes off one potential avenue for liquidators to recoup losses related to Stanford’s $7 billion fraud. Previous cases against Societe Generale SA and telecommunications investor Gary D. Magness have resulted in orders that could help them recover about $229 million.

The bank didn’t have a duty to protect Stanford International Bank from insider abuse, and even if it did, Toronto-Dominion “did not fall below the standard of care of a reasonable banker,” Conway ruled.

Toronto-Dominion said in an emailed statement Wednesday that it was “pleased with the decision.” The joint liquidators said in a statement that they are disappointed, and are considering their position, including the possibility of appealing.

By Kevin Orland, Bloomberg, 10 June 2021

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