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TD Bank successful in litigation surrounding the collapse of Ponzi scheme

Date Closed

June 08, 2021

Lead Office

Toronto

Value

5.00 Billion USD

On June 8, 2021, the Ontario Superior Court of Justice released a judgment in favour of The Toronto–Dominion Bank (TD Bank) in a high-profile case surrounding the collapse of Stanford International Bank (SIB).

Between 1991 and 2009, TD Bank provided banking services to SIB, an offshore bank in Antigua. SIB sold certificates of deposit (CDs) to investors around the world. In February 2009, at the height of the financial crisis, SIB collapsed and was revealed to have been a Ponzi scheme. The liquidator of SIB sued TD Bank alleging knowing assistance and negligence, stating that TD Bank should be responsible essentially for all of the losses of the CD investors – an amount in excess of US$5 billion.

The case went to trial in January 2021, and proceeded virtually for 43 days with 29 witnesses. Justice Barbara Conway of the Ontario Superior Court of Justice dismissed the action, stating that that there had been no knowing assistance. She held that a duty of care in negligence did not arise, and that even if it did TD Bank did not breach the standard of care. She rejected all of the various criticisms levelled at TD Bank personnel, and accepted TD Bank’s expert evidence in its entirety.

TD Bank is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario.

McCarthy Tétrault represented TD Bank with a team led by Geoff Hall that included Junior Sirivar, Christine Wadsworth, Alison Bond, Erin Chesney, Jacob Klugsberg, Aya Schechner and Christine Windsor.

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