Inflation, student loan forgiveness lead to the biggest money stories of the year
Inflation and layoffs were some of the biggest financial topics of 2022. What does this say about the US economy heading into 2023?
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TD Bank and two other banks have agreed to jointly pay $1.35 billion to settle a lawsuit accusing them of complicity in disgraced financier Allen Stanford’s $7 billion Ponzi scheme.
TD Bank, or Toronto-Dominion Bank, agreed to pay $1.2 billion. HSBC Holdings will pay $40 million and Independent Bank – formerly Bank of Houston – $100 million. The settlements must be approved by a judge.
Former investors accused the banks of ignoring red flags and contributing to Stanford’s Ponzi scheme, one of the largest in US history. The three banks have denied the allegations.
What was Stanford’s Ponzi scheme?
Stanford and colleagues falsified financial statements and lied to regulators about their financial condition to help fund Stanford’s lavish lifestyle. Thousands of investors, including small business owners and retirees, lost their savings.
Stanford was arrested in 2009 and sentenced to 110 years in prison in 2012.
Banks deny wrongdoing
TD Bank, Independent Bank and HSBC denied any liability or wrongdoing.
“TD primarily provided correspondent banking services to Stanford International Bank Limited and claims to have acted correctly at all times,” the Canadian bank said in a Monday press release. “TD chose to settle the matter to avoid the distraction and uncertainty of continuing a lengthy legal process.”
TD Bank noted that a previous lawsuit in Canada found no liability and ruled in its favor.
Independent Banks said it agreed to settle “to avoid the costs, risks and distractions of ongoing litigation,” according to a Monday financial statement.
An emailed statement from HSBC said it “is pleased to have resolved this claim, which relates to matters more than a decade old, without admission of any liability or wrongdoing.”
Two other defendants in the lawsuit – Societe Generale SA and Trustmark Corp. — have already agreed to pay $157 million and $100 million, respectively.
Where does the money go?
If the settlements are approved, the trustee responsible for recovering assets for Stanford investors will collect more than $2.7 billion.
“This is nothing short of a monumental recovery,” said Kevin Sadler, a partner at law firm Baker Botts and lead attorney for bankruptcy trustee Ralph Janvey and the Official Stanford Investors Committee. “We look forward to getting the settlements approved soon and distributing these much-needed funds to the Stanford victims.”
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