The Eleventh Circuit Court of Appeals has affirmed the $67m District Court judgment against TD Bank, for its role in facilitating the Ponzi scheme perpetrated by Fort Lauderdale attorney Scott Rothstein, and for illegally concealing the truth during the discovery phase of the case.
The plaintiff, Coquina Investments, was originally awarded $32m in compensatory damages, and $35m in punitive damages. The trial judge found that the bank, concealed, or lied about:
(1) Internal AML alerts on Rothstein bank accounts.
(2) The existence of Special Investigative Protocols.
(3) The removal of a banner designating the Rothstein accounts "High Risk.
(4( Internal emails discussing the bank's bogus "lock letters,' which alleged substantial TD accounts held restricted funds, when there was no money in those accounts.
The discovery violations were the most shocking aspect of the case, as the bank's unethical conduct, in seeking to conceal the truth about its role, demonstrates a lack of ethics, and an arrogant disrespect for the court system. The punishment, $35m in punitive damages, sends a strong message to the banking community, and its lawyers, that this will not stand.