Toronto-Dominion Bank, HSBC Bank PLC and other banks linked to convicted fraudster R. Allen Stanford must stand trial over claims they supported his $7bn Ponzi scheme and should repay defrauded investors, a federal judge ruled.

Judge David Godbey of the US District Court in Dallas on 20 January denied a request by the banks to avoid trial in a lawsuit brought on behalf of investors bilked by Stanford, citing evidence the banks knew his operation wasn’t on the level but still did business with him.