Broward Circuit Judge Jeffrey Streitfeld dismissed a motion by Razorback Funding LLC that sought sanctions against TD Bank for its role in discovery misconduct related to the Scott Rothstein Ponzi scheme litigation.

Although Streitfeld was not convinced with the attempt by Razorback’s counsel to get additional money damages for its clients, the judge made clear he intended to investigate whether TD Bank should be punished.

“The accusations are such that I need to know if they’re true or not,” Streitfeld said. “If I don’t do it, then good luck out there. We don’t have rules, we have chaos.”

He suggested that he might, on his own, proceed with criminal sanctions and refer the case to the office of Broward State Attorney Mike Satz. He reiterated that if there was wrongdoing, a message had to be delivered to the legal community.

“If the best lawyers with the biggest clients don’t play by the rules, where does that leave us?” Streitfeld asked.

Razorback’s counsel suggested it would submit an amended motion but offered no timetable.

Harley Tropin, counsel for the Razorback investors, tried to convince Streitfeld during a Thursday afternoon hearing in chambers that he had inherent authority to punish TD Bank for the misconduct that came to light after Razorback reached a $170 million settlement to resolve civil allegations that the bank aided and abetted Rothstein in his fraud.

In August, U.S. District Judge Marcia Cooke sanctioned TD Bank and found its former counsel Greenberg Traurig negligent for discovery violations uncovered during and after another investor group, Coquina Investments, won a trial seeking damages in January. The words “high risk” on a Rothstein account document was concealed on a copy provided to Coquina investors, and a Greenberg attorney told Cooke an anti-laundering bank policy did not exist. It was turned over in another case after the Coquina verdict.

Cooke ordered the bank to pay opposing counsel’s attorney fees and costs, and made findings that would damage TD Bank’s appeal of the $67 million jury award in the Miami case.

Tropin asserted TD Bank admitted to lying, but Streitfeld interrupted him.

“I’ve not seen any evidence,” Streitfeld said. “Another judge’s ruling is interesting, but it’s not evidence.”

Razorback investors, through their state court lawsuit, claimed they lost $186 million in fraudulent investments at the Rothstein Rosenfeldt Adler firm that was forced into bankruptcy in late 2009.

Tropin, a shareholder at Kozyak, Tropin & Throckmorton in Coral Gables, argued that Razorback should be allowed to preserve the February settlement and get additional money for compensatory and punitive damages, interest and legal fees. The Razorback attorneys have contended they would not have settled had they known of the discovery misconduct.

TD Bank’s new counsel — the bank dismissed Greenberg during the discovery misconduct debacle — Marcos Jimenez of McDermott, Will & Emery in Miami, argued the release waivers in the settlement barred Razorback from even making a factual inquiry.

Streitfeld sided with TD Bank on that issue, telling Tropin the settlement covered all of Razorback’s compensatory claims, adding, “the discovery conduct is related to the lawsuit.”

Streitfeld argued Tropin would have to return the $170 million and start over, in order to pursue the remedy sought.

However, Tropin insisted that was impossible because the money had been disbursed to compensate investors, pay lawyers and satisfy tax obligations.

Streitfeld appeared frustrated that Tropin had not brought a motion for fraud on the court, as officers of the court, in order to allow Streitfeld to proceed with an inquiry that could lead to a court fine.

Streitfeld made a distinction between the interests of the court and the interests of Tropin’s clients.

“You can’t settle away contempt,” Streitfeld said.