Monday, February 9, 2015



Coquina Investments, who recovered a $67m judgment* against TD Bank, for the bank's role in facilitating Scott Rothstein's $1.4bn Ponzi scheme, has asked the trial judge to apply the bank's supersedeas bond, which stayed enforcement while the bank brought an unsuccessful appeal, so that it can recover upon the judgment. The bank has declined to satisfy the judgment, and it appears that some of its actions could be viewed as purely dilatory, to unduly delay the matter after the bank had exhausted all its legal remedies.

The plaintiff, who filed its civil suit in 2010, has asserted that none of the bank's pending motions are relevant, or have any legal merit, which justify any further delays. The case is a textbook lesson for banks; they must always look past lucrative clients, to determine whether there are any red flags which indicate that their client is not operating legitimate business, and could be perpetrating financial crime, with the assistance of the bank. In the Rothstein case, all TD Bank had to do was check the litigation dockets in South Florida courts, and they would have learned that the number of lawsuits in which the Rothstein firm was counsel of record were inconsistent with the volume of deposits.  Ponzi schemes working out of your bank can result in finger pointing at the bank, as a facilitator, when the Ponzi implodes, leaving the victims angry, and bent on justice.

Ponzi schemes must be identified early on, and the account relationship terminated, to avoid the nightmare of a major lawsuit in the aftermath of a Ponzi scheme; The TD Bank case should make all bankers take notice of the consequences of failure to do so.
Case no.: 10-cv-60786-MGC (SD FL).

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