TD Bank has reached a $1.2 billion settlement in a Ponzi scheme lawsuit

New York (CNN) bank 💰 (amtd) It will pay $1.2 billion to settle a lawsuit alleging involvement in an infamous $7 billion Ponzi scheme that was orchestrated by disgraced financier Allen Stanford more than a decade ago.

Toronto-Dominion Bank agreed to pay $1.205 billion to a court-appointed receiver who in turn paid compensation to victims of the scheme but denied any wrongdoing, the bank said in a statement Monday.

Stanford was He was sentenced to 110 years in prison in 2012 After being convicted of 13 counts of fraud in Houston. Prosecutors accused Stanford of selling billions of dollars in fraudulent certificates of deposit operated by Stanford Bank International Limited, an offshore bank in Antigua, causing thousands of victims.

The lawsuit alleged that TD Bank accumulated these deposits in US and Canadian dollar values ​​and consistently ignored red flags about the Antigua-based bank over the years.

“As was the case throughout these proceedings, TD expressly disclaims any liability or wrongdoing with respect to the multi-year Stanford-administered Ponzi scheme and makes no admission with respect to any matter at Stanford as part of the settlement,” the bank said in a statement.

“TD primarily provided correspondent banking services to Stanford International Bank Limited and confirms that it has acted properly at all times,” the bank said.

The settlement announcement comes on the same day that Banks was scheduled to stand trial in Houston federal court, averting a trial. In addition, HSBC will pay $40 million and the independent bank, formerly Bank of Houston, will pay $100 million, the receivership lawyer confirmed.

“HSBC is pleased to have resolved this claim, which relates to matters more than a decade old, without admitting any liability or wrongdoing,” the bank said in a statement.

The independent bank did not immediately respond to a request for comment. in Securities depositThe company denied responsibility or wrongdoing.

Investors claimed five banks – trustmark (TRMK)TD Bank of Houston (now Independent Bank Group (iBTX)), HSBC (HBCYF) and Societe Generale Private Banking, or Suisse – knew or should have known of the alleged fraud committed by Stanford, and that they aided and abetted the disgraced financier in the 20-year scheme.

The latest settlement brings the total recoveries to more than $1.6 billion.

“Considering all the challenges receivership has faced since 2009, this is nothing short of a tremendous recovery,” Kevin Sadler, the receiver’s senior advisor, said in a statement.

TD said it agreed to a settlement “to avoid the distraction and uncertainty of continuing a lengthy legal proceeding.”

Stanford clients were told that the certificates of deposit they had purchased averaged 3-4% higher returns than ADRs, and that the bank made safe investments in products such as stocks and bonds. But the money was actually used to fund the Texas businessman’s lavish lifestyle, including multiple homes in the Caribbean and the United States.

Societe Generale reached a settlement $157 million Trustmark agreed to pay $100 million earlier this year.

James O’Toole contributed to this report.