TD Bank charged by SEC in Rothstein Ponzi scheme
Mark Freerks
Frank Spinosa, former regional VP at TD Bank.
The SEC on Monday charged TD Bank and its former regional VP Frank Spinosa with violating securities laws in connection with the $1.4 billion Ponzi scheme conducted by disbarred attorney Scott Rothstein[6], who is now serving a 50-year prison sentence.
More information will be posted soon.
In the past, the bank and Spinosa have denied wrongdoing while blaming Rothstein. But the bank has already paid $500 million in civil settlements. Following is the news release from the U.S. Securities and Exchange Commission:
The SEC alleges that TD Bank and its then-regional vice president Frank A. Spinosa[7] defrauded investors by producing a series of misleading documents and making false statements about accounts that Rothstein held at the bank and used to perpetuate his scheme. Spinosa falsely represented to several investors that TD Bank had restricted the movement of the funds in these accounts when, in fact, Rothstein could transfer investor money however he desired. Spinosa also orally assured investors that certain accounts held balances totaling millions of dollars, but each account actually held zero to $100.
TD Bank agreed to settle the SEC’s charges in an administrative proceeding and pay $15 million. The SEC filed a complaint against Spinosa in U.S. District Court for the Southern District of Florida.
“Financial institutions are key gatekeepers in the transactions and investments they facilitate and will be held to a high standard of accountability when their officers enable fraud,” said Andrew J. Ceresney, Co-Director of the SEC’s Division of Enforcement. “TD Bank through a regional vice president produced false documents on bank letterhead and told outright lies to investors, failing in its gatekeeper role.”
Paul Brinkmann covers law, accounting, automotive, energy and environmental issues.
References
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- ^ Scott Rothstein (feeds.bizjournals.com)
- ^ Frank A. Spinosa (feeds.bizjournals.com)