TD Bank has agreed to pay $44 million to settle allegations that it aided a South Florida lawyer's $1.2 billion Ponzi scheme.

The hedge fund Platinum Partners said Thursday that it has reached a settlement out of court with TD over allegations that the bank helped Scott Rothstein dupe investors in a scheme involving payouts from structured settlements. Platinum, along with two other hedge funds, sued the bank in 2010, alleging that it told them that Rothstein's accounts held "hundreds of millions of dollars" that did not exist.

TD, which is a unit of Toronto-Dominion Bank, confirmed the settlement and said that it was "in the bank's best interest to put this matter behind us." TD's total payouts in settlements and judgments related to Rothstein's fraud are now more than $300 million.

The settlement will allow the hedge fund to repay its investors and pay its legal fees, said Uri Landesman, president of Platinum Partners. Platinum lent Rothstein's business a total of $440.5 million between August 2008 and April 2009, of which it was able to recover $420 million before the Ponzi scheme's collapse.

"It was a long, drawn-out process and a most unfortunate series of events, but we're happy that we came out even in the end," Landesman said.

Rothstein, who's currently serving a 50-year prison sentence, sold investors accounts receivable from structured settlements that turned out not to exist, and held these "phantom funds" in more than 38 accounts with TD Bank, the complaint says.

Rothstein's Ponzi scheme collapsed in October 2009. In his court testimony, Rothstein said his law firm took part in a range of illegal activities including money laundering, bribery, extortion, drug dealing and prostitution.

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