TORONTO – TD Bank Group said Monday it will pay US$1.2 billion to settle a lawsuit related to one of the largest Ponzi schemes ever orchestrated.
The bank, along with several other financial institutions, was about to face trail in the case in Texas for its alleged role in the $7 billion scheme operated by the Stanford Financial Group.
In agreeing to the settlement, TD denied any liability or wrongdoing and maintained that it acted properly at all times. The bank said it chose to settle the case to avoid the distraction and uncertainty of continuing a long legal proceeding.
TD had provided correspondent banking services to Stanford International Bank Ltd., an offshore bank in Antigua, and had faced allegations of knowing assistance and negligence related to the Ponzi scheme.
In a parallel case against the bank in Ontario, the court ruled in TD’s favour. The ruling was backed up by the Ontario Court of Appeal, while the plaintiffs are trying to appeal the case to the Supreme Court of Canada.
Under the terms of the U.S. agreement, TD has settled with the receiver, the official Stanford Investors Committee and other plaintiffs in the litigation.
TD, which is scheduled to report its first-quarter results on Thursday, said that as a result of the settlement it will take a charge of about C$1.2 billion after tax in the quarter.
The settlement comes as TD works its way through two major acquisitions in the U.S., the US$13.4-billion First Horizon and US$1.3-billion Cowen Inc. deals, while also facing higher capital expectations from regulators and investors.
National Bank analyst Gabriel Dechaine said that while the settlement could push the bank below the capital buffer expected by investors, he doesn’t expect TD would need to sell shares to make up the shortfall.
The bank could rely either on internal capital generation, or sell down its Charles Schwab Corp. holdings to make up any shortfall, while if it did elect to raise equity it would mean only about a one per cent dilution to current shares outstanding, he said.
Barclays analyst John Aiken said that the settlement resolves the overhang of the case and that he expects the news to be positive for the bank’s outlook.
“Although the absolute dollar amount is significant, we believe that it was far less than the worst-case scenario envisioned by some in the market,” he said in a note.
The settlement is the latest major charge recorded by Canadian banks from U.S. lawsuits.
CIBC said earlier in February that it would pay US$770 million to settle a lawsuit brought against it by Cerberus Capital Management L.P. related to finance transactions linked to the 2008 financial crisis.
In November, BMO took a US$1.1 billion charge related to a separate Ponzi scheme in Minnesota after a jury awarded damages of about US$564 million against the bank. BMO said at the time it would appeal the decision.
The Ponzi scheme in the TD settlement was run for 20 years by Allen Stanford and involved more than 30,000 accounts. Stanford was sentenced to 110 years in prison for its orchestration.
This report by The Canadian Press was first published Feb. 27, 2023.
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Those Banks that facilitated that Scamp must now be made to pay. Greed is not a bad thing. In my opinion,it just depends on what you are greedy about. Allen Stanford,was Knighted by Antigua to become Sir Allen Stanford. What a low down dirty shame. Now he is in the Federal Penn for the remainder of his earthly life. Did he take any of the monies he thief wid he inna that Prison? Greed was a contributor to his downfall.
Take your dirty paws of the banks. The banks were a victim in the scheme just like many unwitting persons who would have provided services for Sir Stanford.
The Government of Antigua and Barbuda was a victim as well as they didn’t know that Sir Standford was running a ponzi scheme.
The Caribbean Premier League (CPL) was also a victim as they didn’t know that the money used to finance the cricket came from dirty activities. No cricketer should be ashamed for playing in the CPL and getting paid well.
Greed is a terrible thing! Greed is a deadly sin! To say that greed is not a bad thing means that you are a bad person!
@BILBO/DILDO: THE PERSON APPOINTED TO OVERSEE OPERATIONS SUCH AS STANFORD’S.HE FELL FOR THE FREEBS/CRUMBS FROM STANFORD’S TABLE.HE IS NOW SERVING PRISON TIME IN A FEDERAL PENN IN TEXAS.
Thank you so much. I’m in the USA, and I don’t even know what Sir Allen was supposed to have done wrong. At any rate, the court convicted him of something, and I hope he does his time safely and comes out a better person and is not afraid to run another business. He did good things for Antigua, and I appreciate him.
How about payment for participation in the slave trade?
Yes I agree with you. The payments should start with our African “brothers and sisters” who initially sold us off to the foreigners as slaves. I blame our black African “brothers and sisters” first for selling us and the foreigners secondary for buying us.
Some Africans may have sold slaves, but foreigners kidnapped many as well. “As the demand for enslaved people grew, the Portuguese began to enter the interior of Africa to forcibly take captives; ” But I still like CR7. Lets let bygones be bygones.
Good point. They are silence whff er n it comes to slave trade monies. Barclays was one of the biggest profiteers
Thank God this took place under your UPP Government. Blame your UPP. BLACK MAN and BRIXTONIAN will keep quiet.
I don’t know HOW MANY more times I have to remind people that around that time I was an ardent supporter of the ABLP, until I realised that they promise much but deliver little.
Again PETE, I hope this helps, until the next time you talk more ‘tupidness …👍
BRIXTONIAN..Are you happy with your UPP current Opposition and Political Leader ? This question is for BRIXTONIAN and BLACK-MAN.
I don’t expect a response.
@PETE:Stanford was Knighted by The ALP Administration.
“Sir” Allen Stanford received the knighthood conferred by Antigua and Barbuda’s government in 2006, at a time when he was the tiny Caribbean country’s biggest foreign investor and a major sponsor of cricket and other sports in the region.
You guys lies will always be exposed. Who was the government in 2006?
@Sidelines: Who recommended him for that Knighthood?
That is beside the point. You mentioned that it was under the ABLP administration. If you stop spreading untruth I would not have reasons to correct you.
You ALP supporters are blind, dumb and deceitful. You try to blame UPP for everything when you know they are lies and ALP is responsible for all the ills in this country. You should start going to church and listen to the words of God.
Standford exposure might.of occurred under UPP, but it was ALP who allowed him initially to operate in Antigua without properly vetting the scamp who was Knighted not with UPP blessings.
Similarly ALP has entered into a venture with Marvellous Mike and the crooked Nigerian who is in employment at the Ministry of Argiculture, who is a director of the Nigeria and Antigua Commerce.
To this day, no one knows what precisely the Commerce is trading, but what we have seen are planes full.of Nigerians and other Africans brought to our shores and the director announced on Obsetver radio that the Africans were brought to Antigua because our population is low.
He further added the he and the.Prime Minister of Antigua and Barbuda are
tight! Are we, as citizens of AandB that the Nigerian gentleman is indicating that the Prime Minster us in support of human trafficking?
The answers could only come about if the King’s representative agreed to an independent inquiry, or alternatively Homeland Security could arrest the Nigerian gentleman for human trafficking, they would not need a warrant for his arrest because of the nature of the offence.
Additionally , Interpol could also issue a warrant for his arrest. Undoubtedly, once he is arrested others that are part of the syndicate should expect a knocking at their doors, because he won’t go down alone.
That’s right @ Antigua4ever, just like UPP would have inherited the Antigua Airlines Scandal, the FTX scandal, the Global Bank scandal, IHI, and all the other money laundering, scams, crooks that hold our diplomatic passports, Saab Moran, Jing and the list goes on. In many ways, it may was a good thing that ALP were left, barely, to clean up all their mess. Of course, the Labourites will try to spin this and blame UPP, when they know damn well it was all a result of the greedy, corrupt, liard ALP. Sanford is on record offering Gaston Brown and Mowlyn Joseph money. The same CIP that they marched against, they couldn’t wait to implement it. Don’t forget they were in objection to Social Security and promised to repay some 40 million collected. We got NADA. Surprise, surprise! They promised back pay, to remove work permit fees, and what happened?
They have been making promises to win elections, and people continue to buy the lies. What a place this Antigua is!
From what I know, the bird administration was in power in the late 80’s to early 90’s when Allen Sanford was chased bare naked out of Montserrat and set up shop immediately in Antigua with no resistance.. 😂😆😂. Some years later while I was in the USA and travel back to Antigua, I was shocked by the amount of business this man had all over the island, I could only laugh at that time. This kind of corruption takes a lot of heads to turn the other way and eyes shut wide opened!!!
And did you also know that he won his case against the British Government and he donated all the proceeds of that to the Montserrat local government. He didn’t keep a cent for himself. He did the same thing when working with the USA DEA they closed Ann account a one of Columbia’s largest drug barons. He was entitled to 10% of the proceeds, but donated it all to the Treasury in Antigua. US$3million. Did you know that?
@Islanman26: Well said !!
Stanford still alive???…lol….man used to own antigans and use people like he personal slaves… thief people money never do well in life…
Stanford invested Billion in Antigua and Barbuda. Investments that can be seen all over the country. Even our very own Hospital was financed by the Stanford Group. A man that is involved in a Ponzi Scheme has no need to make such big investments in Real-Estate. He needs Liquid Cash to be able to run away when the shit hits the fan. And before the authorities closed the bank no one was denied access to their monies. In fact, the run on the bank started months before, when rumors of improprieties started to circle. And many investors demanded their monies. Any bank that gets a run on it will fall as you cannot liquidate that fast. No bank keeps all its money cash on hand. Liquidation causes destruction of Capital. Something that is worth $1,00 will be sold for 10cents. That is what happened in this case. Therefore, in my opinion, the liquidator is to be blamed for most of the loss of monies of the small depositors. I also believe that had the authorities allowed Stanford to execute and bring to fruition his pet project the billionaires club of Guiana Islands, the same type of clubs we see at Mill Reef, Jumby Bay and now PLH in Barbuda, the returns of that investment alone would have been sufficient to pay back any of his investors. The plan was to build 40 homes for the most wealth. Who would pay an annual fee of $20miilion. That is $800million alone in Club Fees. Other Services will be offered like Concierge Services and others. A Ponzi Scheme doesn’t have to go to that extent to fleece others out of monies. What I believe he should have done is to be open with his investors as to what he would be using their monies for. That was Risk Capital Investment. Instead, he loaned the monies from his bank to himself and then invested it in Antigua. Investors had no knowledge of that.
I love you. I’m trying to get him pardoned in Florida, and I encourage anyone in the US to write to defend him. He did so much for Antigua, he just does not seem like a greedy fraud to me. I have a business here in the US, and there are so many laws. It is easy to make a mistake. If he committed some “on paper” crime, I forgive him. You are right about the “bank run” as well. Here is a handshake.
I have said it many times. Liquidation only benefits the LIQUIDATOR. They only work to pay themselves their exorbitant fees. And the point is they are protected by the courts. While they are destroying capital, selling assets at rock bottom prices. Someone will one day have to stop this madness. You cannot tell me that selling a property worth $100million for $10million is looking after the estate? You might as well have given it away to charity.
Also, you are right about banks. Even in the US, they take investor money. They lend that money to others, or buy bonds, stocks, liens….etc. They use depositor money to earn more than they pay in interest.
If the depositors ask for all their money plus interest owed at the same time, even banks in the US and Europe may not have it. They have to have RESERVES, not all the money. Who was the liquidator?
Okay, last comment. I love how you say he should have just told his investors. I also agree. He should have told them even if he was scared or embarrassed. Some of them may have tried to sue him anyway…Like Ooh…you paid for a hospital? Wey mi money deh!? Being high profile can make you a target…
In the US, it may be illegal to transfer money from one of your businesses that is failing to one that needs money. It may be Okay if you don’t have outside investors, but I’m not sure. I think you can transfer, but you have to do paperwork and notify interested parties of the move. The business will also have to report the inflow as income and pay taxes on it.
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