A federal judge determined that Toronto-Dominion Bank, HSBC Bank PLC, and other banks tied to convicted fraudster R. Allen Stanford must face charges of supporting his $7 billion Ponzi scheme and must compensate duped investors.
The banks’ attempt to avoid trial in a lawsuit brought on behalf of investors bilked by Stanford was denied by Judge David Godbey of the US District Court in Dallas on January 20, citing evidence that the banks knew his operation wasn’t on the level but still did business with him.
In a written order, the court recommended that the evidence be reviewed by a jury and that the trial be held in Houston, where Stanford’s investment firm was based and where he was convicted and sentenced to 110 years in prison for one of the greatest frauds in US history in 2012.
Following Stanford’s arrest in 2009, a number of his investors filed a lawsuit alleging that TD Bank, HSBC, Societe Generale Private Banking, and Trustmark National Bank provided financial services that aided and abetted his criminal activities.
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