TD Bank Group says it will pay $1.205 billion US to settle a lawsuit in connection with a multi-year Ponzi scheme operated by the Stanford Financial Group.
Under the terms of the agreement, TD has settled with the receiver, the official Stanford Investors Committee and other plaintiffs in the litigation.
The court-appointed receiver is in charge of recouping funds lost to the scheme of Texas financier Allen Stanford, who is currently serving a 110-year prison sentence in the matter.
Stanford defrauded more than $9 billion of client funds, and any funds the receiver can claw back will go to paying restitution to victims.
TD, which provided correspondent banking services to Stanford International Bank Ltd., denied any liability or wrongdoing and maintained that it acted properly at all times.
The bank says it chose to settle the case to avoid the distraction and uncertainty of continuing a long legal proceeding. It noted that a similar lawsuit on the matter filed in Ontario court "ruled entirely in TD's favour and found no liability."
TD is expected to report its first-quarter results on Thursday.
As a result of the settlement, the bank says it will take a charge of about $1.2 billion after tax in the quarter.