MIAMI, Feb 28 (Reuters) - TD Bank, the U.S. arm of Canada's Toronto-Dominion Bank, has reached a settlement with investors who claimed it helped a South Florida lawyer convicted of running a $1.2 billion Ponzi scheme, a bank spokeswoman said on Tuesday.

The settlement came days before the case involving investors known as the Razorback Group was set to go to trial.

"We can confirm that a settlement has been reached," said Rebecca Acevedo, a TD Bank spokeswoman. "We feel it is in the bank's interest to put this matter behind us."

Terms were not immediately made public, but the Miami Herald and Barrons have reported the bank will pay $170 million. TD Bank lawyers sought to keep the terms confidential and a judge is expected to hold a hearing on the matter on Friday.

Lawyers for the more than 50 investors sued TD Bank claiming it was aware Scott Rothstein, a disbarred lawyer now serving a 50-year sentence for investment fraud, used accounts at the bank to carry out the scheme.

The investor group claimed it lost at least $180 million.

Rothstein, whose Fort Lauderdale law firm is now defunct, has been compared to other Ponzi scheme kingpins including Bernard Madoff, who pleaded guilty to a $65 billion investment fraud and is now serving a 150-year prison sentence.

Rothstein has admitted he conned investors who believed they were buying shares in legal settlements.

Last month, a Miami jury ordered TD Bank to pay $67 million to a Texas investment company, which was also among Rothstein's victims.

The company, Corpus Christi-based Coquina Investments, said in its lawsuit that employees at TD Bank aided Rothstein in operating his Ponzi scheme.

(Reporting by Kevin Gray)

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