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Three banks agreed to pay $1.35 billion to resolve litigation by former Allen Stanford buyers who accused them of contributing to the imprisoned financier’s huge Ponzi scheme.
Canada’s Toronto-Dominion Financial institution pays $1.205 billion, HSBC Holdings Plc pays $40 million and Unbiased Financial institution Group, previously Financial institution of Houston, pays $100 million.
Cash will go to a court-appointed receiver who's repaying victims of Stanford’s $7.2 billion fraud, which was uncovered in Feb. 2009, two months after the arrest of Bernard Madoff.
Stanford’s Ponzi scheme was on the time thought of the most important apart from Madoff’s.
The settlements require a choose’s approval.
They avert a trial that had been scheduled for Monday in Houston federal courtroom, the place TD, HSBC and Unbiased Financial institution had been the final remaining defendants.
Two different defendants, France’s Societe Generale and Mississippi-based Trustmark, settled for a respective $157 million and $100 million earlier this 12 months.
As soon as thought of a billionaire, Stanford, 72, is serving a 110-year jail sentence after being convicted in 2012 for defrauding about 18,000 buyers.
Prosecutors stated he offered fraudulent high-yielding certificates of deposit via his Antigua-based Stanford Worldwide Financial institution, and used investor cash to make dangerous investments and fund a lavish way of life.
The receiver, Ralph Janvey, has recovered greater than $2.7 billion for Stanford’s buyers.
“Given all of the challenges confronted by the receivership since 2009, that is nothing wanting a monumental restoration,” stated Kevin Sadler, a Baker Botts associate who represents Janvey and the Official Stanford Buyers Committee.
TD denied legal responsibility and stated it settled to keep away from the distraction and threat of additional litigation. It'll document a C$1.2 billion (US$885 million) first-quarter after-tax cost.
The payout is “far lower than the worst-case state of affairs envisioned by some,” and needs to be “optimistic for TD’s outlook,” Barclays analyst John Aiken stated in a analysis be aware.
HSBC and Unbiased Financial institution additionally denied legal responsibility. Unbiased Financial institution expects to acknowledge a $100 million first-quarter expense for its settlement, a regulatory submitting exhibits.
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