Posted by & filed under Auditing, Fraud.

Description: TD Bank is being sued in Ontario Superior Court for $5.5 billion for its role in correspondent banking for the Stanford International Bank.¬† Stanford’s founder, Allen Stanford, is serving a 110 year prison sentence for leading a fraud that removed $5.5 billion from the pockets of over 20,000 investors. The claim filed against TD, which¬† had a long relationship with Stanford, alleges that TD kept doing business with the disgraced firm after other banks ceased doing so, thereby permitting the Ponzi scheme to continue. It appears though that only a small cadre of Standford staff were in on the scheme with the real financial results concealed on a well-protected hard drive.

Source: Globeandmail.com

Date: January 29, 2016

Link: http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/td-missed-warning-signs-about-notorious-fraudster-lawsuit-alleges/article28467721/

Discussion Points:

1) What do you think the audit community should do to respond to massive frauds like this?

2) Why do you think the Stanford insiders called the hard drive “the football?”

3) From your reading of the article, how do you feel about TD’s position?

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