(Adds TD Bank comment)
By Dena Aubin
NEW YORK, July 29 (Reuters) - A U.S. federal appeals court has upheld a $67 million jury verdict against TD Bank, part of Canada's Toronto-Dominion Bank, for helping convicted former lawyer Scott Rothstein run a Florida Ponzi scheme that cost investors more than $1 billion.
In a decision on Tuesday, a three-judge panel from the 11th U.S. Circuit Court of Appeals, affirmed a lower court's decision not to overturn the verdict or grant TD Bank a new trial in a lawsuit brought by Texas investment partnership Coquina Investments.
TD Bank was accused in Coquina's 2010 lawsuit of playing a crucial role in Rothstein's Ponzi scheme by assuring investors that their funds were locked in a special account and were safe.
"TD Bank is disappointed with today's Coquina ruling and is considering all of its remedies," spokeswoman Rebecca Acevedo said.
David Mandel, who represented Coquina, said he was gratified by the court's decision.
"They say justice rides a slow horse," Mandel said. "The wait has been excruciating, but it was worth it."
Rothstein was sentenced to 50 years in prison in 2010 after pleading guilty to the investment fraud. In pronouncing the sentence, U.S. District Judge James Cohn said Rothstein preyed on wealthy investors, using their money to support an opulent lifestyle.
TD Bank last year agreed to pay $52.5 million to settle separate U.S. regulatory charges that it failed to report suspicious activity in accounts used by Rothstein. The bank did not admit or deny wrongdoing.
Those charges were brought by the U.S. Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency and the U.S. Securities and Exchange Commission.
According to Coquina's lawsuit, Rothstein sold investor stakes in what he said were settlements of potential lawsuits over sexual harassment or whistleblower claims. Rothstein told investors that plaintiffs agreed to sell their rights to a full settlement at a discount in exchange for an immediate lump sum.
TD bank told investors that funds from the settlements they had purchased were being deposited into a separate TD Bank account and could not be distributed to anyone other than the investors, according to the lawsuit.
In reality, the funds were either siphoned off by Rothstein or never actually deposited into the account, the lawsuit said.
The lawsuit accused the bank of racketeering and aiding and abetting fraud.
A U.S. District Court in Fort Lauderdale had denied TD Bank's bid to have the award overturned or to order a new trial.
TD Bank had appealed, arguing that Coquina did not have standing to sue because it only acted as a conduit for investors' money and was not itself injured.
The appeals court disagreed, saying Coquina invested with Rothstein in its own name, paid for investments with funds from its own bank account and suffered an economic loss from Rothstein's scheme.
The case is: Coquina Investments v Rothstein et al, 11th Circuit Court of Appeals, Case No 12-11161 (Editing by Lisa Shumaker)