Court upholds $67 mln verdict against TD Bank in Ponzi suit

Tue Jul 29, 2014 2:59pm EDT
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By Dena Aubin

NEW YORK, July 29 (Reuters) - A federal appeals court has upheld a $67 million jury verdict against TD Bank, part of Canada's Toronto-Dominion Bank, for helping convicted former lawyer Scott Rothstein run a Florida Ponzi scheme that cost investors more than $1 billion.

In a decision on Tuesday, a three-judge panel from the 11th U.S. Circuit Court of Appeals, affirmed a lower court's decision not to overturn the verdict or grant TD Bank a new trial in a lawsuit brought by Texas investment partnership Coquina Investments.

TD Bank was accused in Coquina's 2010 lawsuit of playing a crucial role in Rothstein's Ponzi scheme by assuring investors that their funds were locked in a special account and were safe.

A spokeswoman for TD Bank did not immediately respond to a request for comment.

David Mandel, who represented Coquina, said he was gratified by the court's decision.

"They say justice rides a slow horse," Mandel said. "The wait has been excruciating, but it was worth it."

Rothstein was sentenced to 50 years in prison in 2010 after pleading guilty to the investment fraud. In pronouncing the sentence, U.S. District Judge James Cohn said Rothstein preyed on wealthy investors, using their money to support an opulent life style.

TD Bank last year agreed to pay $52.5 million to settle separate U.S. regulatory charges that it failed to report suspicious activity in accounts used by Rothstein. The bank did not admit or deny wrongdoing.   Continued...