Lawmakers want banks punished over massive Ponzi scheme

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Lawmakers are asking a top federal regulator to crack down on several banks connected to a mid-2000s Ponzi scheme, arguing the government hasn’t done enough to get victims compensation.

The lawmakers called on the Office of the Comptroller of the Currency (OCC) to punish several banks for holding funds for Allen Stanford, convicted in 2012 of running the second-largest Ponzi scheme in United States history.

In a letter to acting Comptroller Keith Noreika dated Aug. 8, Reps. Roger Williams (R-Texas), Bill Posey (R-Fla.), Charlie Crist (D-Fla.) and Vicente González (D-Texas) asked the OCC to update them on efforts to hold the banks accountable, compensate victims and prevent similar schemes from happening again.

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TD missed ‘warning signs’ about notorious fraudster, lawsuit alleges

Allen Stanford, the Texas-born ex-billionaire responsible for one of the world’s largest Ponzi schemes, is serving a 110-year sentence in a Florida prison. But outside those walls, other legal battles over his massive fraud are still being waged and involve one of Canada’s largest financial institutions: Toronto-Dominion Bank.

Mr. Stanford, now 65, was once known as Sir Allen, after he was knighted in his adopted home of Antigua and Barbuda, before his title was revoked. He was supposed to be running what appeared to be a staggeringly successful private offshore bank. But in fact, he and a small group at the top of his organization were looting his Stanford International Bank Ltd., using some new investors’ money to pay returns to previous ones and living large on much of the rest.

His empire came crashing down in 2009, when his bank was exposed as a massive fraud that cost his 21,000 investors at least $5.5-billion (U.S.). But until then, he enjoyed a lifestyle worthy of a Bond villain, acquiring his own small Caribbean island for $63-million, a fleet of private jets and helicopters, and a handful of luxurious mansions that included a 57-room “castle” in South Florida, complete with a moat…………………

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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum

Multi-billion lawsuit against TD Bank headed to trial

Stanford liquidators seeking damages of US$5.5 billion

The Superior Court of Justice — Ontario has dismissed a motion for summary judgment from Toronto-Dominion Bank, which sought to dismiss a multi-billion dollar claim against the bank by the liquidators of Stanford International Bank Ltd. (SIB).

According to the court’s ruling on the motion, TD was SIB’s main correspondent bank until the Antigua-based bank was exposed as a massive Ponzi scheme in 2009, and collapsed. In 2011, the liquidators commenced an action against TD on behalf of SIB and its customers, seeking damages of US$5.5 billion for alleged negligence and knowing assistance. Those allegations have not been proven.

“Essentially, the claim alleges that as SIB’s correspondent bank from the 1990s to 2009, TD failed to act in accordance with the standard of care applicable to a reasonable banker,” the motion decision says.

“The plaintiffs allege that TD failed to conduct proper due diligence before it started providing banking services to an Antiguan off-shore bank, and compounded its negligence by continuing to provide banking services to SIB for 20 years. They allege that TD ignored public information and red flags that should have led it to terminate SIB’s access to TD’s facilities, report the conduct of Stanford and others to the appropriate authorities, and/or freeze SIB’s accounts,” the decision says.

TD brought a motion seeking a summary judgment to dismiss the claim on the basis that it came after the two-year limitation period had expired. TD argued that the bank’s previous liquidators ought to have known that SIB had a claim against TD before Aug. 22, 2009, based on the widespread publicity surrounding the case, among other things.

However, the court dismissed the motion, ruling that it could not determine, without a trial, when a possible claim against TD could have been discovered.

“The issue of when the former officeholders ought to have known that SIB had a potential claim against TD cannot be fairly adjudicated on this motion and is a genuine issue for trial,” the decision says.

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Judge allows case against Stanford banks to go on

A federal judge in Dallas has upheld most of the claims in a major lawsuit against five banks accused of playing a role in Texas financier Allen Stanford’s massive Ponzi scheme.

Tuesday’s ruling by U.S. District Judge David Godbey means the suit filed in 2009 on behalf of thousands of Stanford victims can proceed against the banks, which include HSBC, Societe Generale, Toronto Dominion Bank, Trustmark National Bank and the Bank of Houston. The suit accuses the banks of playing “an essential role” in the $7 billion fraud, which each bank has denied.

While Godbey threw out some of the claims the victims were pursuing under Texas state law, the ruling allows the bulk of the case to move forward in federal court. That is important to the more than 20,000 Stanford victims, because unlike victims of the Bernard Madoff Ponzi scheme uncovered just two months earlier, they have recovered almost nothing. Also, while the Justice Department and federal authorities reached a $2 billion settlement last year with Madoff’s primary banker, JPMorgan Chase, they have thus far declined to pursue similar cases against Stanford’s bankers. That means that for Stanford’s victims, this civil case may be one of their last remaining hopes for a meaningful recovery.

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Fishman Haygood Phelps Walmsley Willis & Swanson, LLP to Join the Legal Team Representing Stanford Investors

NEW YORK–(BUSINESS WIRE)–Butzel Long, PC (“Butzel Long”),, and Fishman Haygood Phelps Walmsley Willis & Swanson, LLP (“Fishman Haygood”),, today announced that Fishman Haygood will join the team of lawyers representing former investors and depositors in Stanford International Bank, Ltd. (“SIBL”). A class action lawsuit that Butzel Long lead attorney Peter Morgenstern filed on behalf of investors who purchased SIBL Certificates of Deposit (“CDs”) is pending in the United State District Court for the Northern District of Texas. That lawsuit names as defendants Trustmark National Bank, HSBC Bank, The Toronto-Dominion Bank, Private Banking (Suisse) S.A., and Bank of Houston. The lawsuit seeks damages on behalf of SIBL CD investors for the roles that they allege the named defendants played in the CD scheme masterminded by R. Allen Stanford, which scheme the court determined to have been a fraud in Janvey v. Alguire, USDC N.D. Tex. Case No. 3:09-CV-0724-N Doc. No. 456. A recent Supreme Court decision upheld the investors’ right to bring certain claims under state law, freeing the case to go forward. With this recent development, Fishman Haygood lead attorney James R. Swanson has agreed to join the legal team representing investors in their effort to maximize the recovery on their legal claims against the defendant banks. Mr. Swanson is active in major litigation pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors. Mr. Morgenstern has been heavily involved with a number of cases filed on behalf of SIBL CD investors. Mr. Swanson and Mr. Morgenstern intend to combine their expertise and work closely on behalf of the SIBL CD investors.

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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum