TD Bank has agreed to pay US$1.2bn to settle a lawsuit alleging its involvement in a US$7bn Ponzi scheme orchestrated by Allen Stanford over a decade ago, according to multiple reports in the US.
Stanford was sentenced to 110 years in prison in 2012 after being found guilty on 13 counts of fraud-related charges in Houston.
Prosecutors charged that Stanford sold billions of dollars in fraudulent certificates of deposit administered by Stanford International Bank Ltd, ensnaring thousands of victims.
The lawsuit claimed TD Bank collected these deposits in US and Canadian dollar values and continuously ignored red flags about the Antigua-based bank over the years.
TD Bank denies any liability or wrongdoing. The settlement brings the total recoveries amount to more than US$1.6bn, and the banks have managed to avert a trial in Houston federal court.