TD Pays for Rothstein Ponzi Scheme
A $1.2 billion Ponzi scheme that blew up in 2009 has driven TD Bank Group (NYSE:TD) to make a provision of $255 million related to associated litigation against defrauded investors.
The scheme was run by a once prominent South Florida lawyer, Scott Rothstein, and involved phony legal settlements. The lawyer is serving a 50-year prison sentence and co-operating with investigators. The lawyer used a TD Bank Branch in the ponzi scheme. However, a U.S. federal jury earlier held TD Bank liable to pay $67 million to Coquina Investments for its role in the fraud.
“Based on the current environment and information, the bank believes this provision is appropriate and while additional exposure is possible, it will be manageable,” TD said in a statement.
Here’s how TD shares are reacting to the news:
The Toronto-Dominion Bank (NYSE:TD): TD shares recently traded at $77.13, down $0.11, or 0.14%. They have traded in a 52-week range of $64.56 to $89.79. Volume today was 268,851 shares versus a 3-month average volume of 657,650 shares. The company’s trailing P/E is 12.07, while trailing earnings are $6.39 per share.
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