Tuesday, March 3, 2015


TD Bank has paid the $67m judgment entered against it last year, awarded in US District Court in Florida, for facilitating Scott Rothstein's billion dollar Ponzi scheme. Though there was no announcement by the bank, nor any press on the payment. Plaintiff's counsel filed what amounts to an acknowledgment that full payment was made, just prior to the deadline set by the District Judge*. I did later find a note on it in a relatively obscure Ponzi website, PonziTracker, that was reprinted on plaintiff's law firm's website; Mainstream press ignored it.

Although the Eleventh Circuit Court of Appeals affirmed the District Court verdict and judgment, the Bank recently filed what it captioned as an "Amended Appeal, " apparently still looking to overturn the judgment, though it is debatable whether it has any chance of success. What is important is that the Bank was held accountable for the actions of an ambitious senior officer, who knew that there was no truth behind his statement to the victims, concerning the existence, and safety, of funds they were relying upon to be paid on their "investments," the so-called lock letters, which were bogus.

While the Bank is certainly entitled to the best defense that it can muster, and afford, in any civil suit, its conduct, and that of its former counsel,  demonstrated a bare-knuckle approach to litigation, that at times, went over the line, and was soundly sanctioned by the Court. This case will be remembered, as it demonstrates that the lure of lucrative profits can blind a bank officer to his responsibilities, and that a bank can be found liable for his misconduct, where it causes damage to third parties.

Let us hope that Coquina Investments vs. TD Bank will remind banks to always double-check their best clients periodically, to ensure that their activities are not only legitimate, but that suspicious activities of the clients are not being covered up by bankers who are deriving benefits from client fast-track success stories that are really financial crimes.
* Plaintiff's counsel also advised the Court that the $9m paid to the client, by the RRA Receiver, has been refunded forthwith, thereby deflating the Bank's often-stated position, that the Plaintiff would reap a double recovery, if it paid the judgment. Did the Bank actually believe that plaintiff's counsel would permit that ?     

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