U.S. Bank (USB) will have to face a lawsuit alleging that it helped a Ponzi schemer steal hundreds of millions from his clients, a judge ruled Tuesday.

Judge Linda Reade of the U.S. District Court in Iowa rejected the Minneapolis bank's motion to dismiss a case filed by the Commodity Futures Trading Commission over the bank's role in the collapse of Peregrine Financial Group. The suit, filed in June, claims that U.S. Bank allowed Peregrine founder Russell Wasendorf to raid what should have been a segregated customer account for his own use.

Wasendorf stole more than $215 million from the U.S. Bank account over two decades, court filings state. Peregrine Financial collapsed in July 2012 amid a CFTC probe into its handling of accounts, and this year Wasendorf was sentenced to 50 years in prison and ordered to pay $215 million in restitution.

In its motion to dismiss the case, U.S. Bank claimed that it does not bear responsibility for the losses, arguing that Wasendorf hid the Ponzi scheme from the bank and that it was itself harmed by his actions.

Judge Reade concluded that the CFTC's suit may proceed. The CFTC wants U.S. Bank to pay full restitution to Peregrine's customers, along with a civil penalty.

"The court shall deny the motion to the extent that it asks the court to dismiss the commission's claims that U.S. Bank improperly held customer funds," Judge Reade wrote in the order issued Tuesday.

In a statement on the dismissal, U.S. Bank said, "We know that many of the allegations in the CFTC's complaint are false and now look forward to establishing that before the court."

U.S. Bank, a unit of the $349 billion-asset U.S. Bancorp, is the first bank to be sued over its handling of Peregrine accounts. A trustee for the Peregrine estate said in May that he might bring charges against JPMorgan Chase (JPM) as well.

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