Toronto-Dominion Bank defeated a lawsuit that sought nearly $4.3 billion in damages over allegations the institution ignored red flags about R. Allen Stanford’s financial empire before it was exposed as one of the largest-ever Ponzi schemes, WSJ Pro Bankruptcy reported. A judge in Ontario on Tuesday dismissed legal claims brought by court-appointed liquidators of Stanford International Bank Ltd., a former TD Bank customer, following a trial that examined an 18-year business relationship that unraveled when U.S. authorities exposed Mr. Stanford’s fraud in 2009. Liquidators appointed in Antigua, where SIB was located, have been pursuing TD and other banks that did business with Mr. Stanford in an attempt to recover money for creditors. Justice Barbara Conway of the Ontario Superior Court of Justice ruled TD Bank employees had no reason to believe at the time that Mr. Stanford was committing fraud or there was anything amiss at SIB. Liquidators argued there were warnings before 2009 that should have tipped off TD Bank, saying it should be liable for between $1.1 billion and $4.28 billion in damages, according to the ruling. But Justice Conway said Mr. Stanford and other SIB directors “went to great lengths to present SIB as a responsible, upstanding bank,” noting it hired experienced bankers and accountants, kept nice offices and presented professional annual reports. The SIB liquidators said they were disappointed with Justice Conway’s ruling, “which leaves many thousands of creditors around the world without justice, more than a dozen years after the collapse of Allen Stanford’s massive Ponzi scheme.” The liquidators are evaluating SIB’s position and considering an appeal, they said.
