Ontario court dismisses SIB's $4.5 bln case against TD Bank

The Ontario Superior Court of Justice has dismissed Stanford International Bank's (SIB) $4.5 billion damages claim against Toronto-Dominion Bank over its role in a massive Ponzi scheme, SIB said on Wednesday. Lawyers for the court-appointed liquidators of SIB, the collapsed Antigua bank of former Texas financier Robert Allen Stanford, had alleged negligence and "knowing assistance" by TD in providing a correspondent banking account that Stanford used to perpetuate fraud.

The Ontario Superior Court of Justice has dismissed Stanford International Bank's (SIB) $4.5 billion damages claim against Toronto-Dominion Bank over its role in a massive Ponzi scheme, SIB said on Wednesday.

Lawyers for the court-appointed liquidators of SIB, the collapsed Antigua bank of former Texas financier Robert Allen Stanford, had alleged negligence and "knowing assistance" by TD in providing a correspondent banking account that Stanford used to perpetuate fraud. Justice Barbara Conway of the Ontario Superior Court said in ruling dated June 8 that TD did not owe a duty of care to SIB to protect it from "insider abuse". Even if a duty had existed, TD did not fall below the standard of care of a reasonable banker, she added.

TD's lawyers had argued the bank did not know about the fraud, and that damages should be limited to the estimated $5 million in profit from its relationship with SIB. "We are pleased with the decision," TD said.

SIB said it was disappointed with the ruling and considering appealing it. Stanford is serving a 110-year prison term in the United States after being convicted in 2012 of running a $7.2 billion Ponzi scheme.

Correspondent banking is the business of providing services to offshore financial institutions. The joint liquidators are Grant Thornton in the British Virgin Islands and the Cayman Islands.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)