Société Générale Private Banking has agreed to pay $157 million to settle a lawsuit that alleges a group of banks enabled the $7 billion Ponzi scheme of financier R. Allen Stanford, according to a federal court filing Tuesday in Texas.
(Bloomberg) — Société Générale Private Banking has agreed to pay $157 million to settle a lawsuit that alleges a group of banks enabled the $7 billion Ponzi scheme of financier R. Allen Stanford, according to a federal court filing Tuesday in Texas.
The settlement comes as HSBC Bank, Toronto-Dominion Bank and Independent Bank — formerly Bank of Houston — are set to go to trial on Feb. 27 in Houston over claims they helped support Stanford’s fraud through the banking services they provided.
Trustmark National Bank also entered into a settlement prior to trial, agreeing to pay $100 million to the court-appointed receiver responsible for recouping funds to repay victims of the scheme, which came to light in 2009.
Stanford International Bank sold billions of dollars in fraudulent, high-interest certificates of deposit, promising to reinvested the returns in high-quality securities. But the dollars were instead used to support Stanford’s extravagant lifestyle and to pay promised returns to prior investors. US regulators seized the bank’s assets in 2009 and charged its top executives with fraud. At the time, the plot was the second-largest Ponzi scheme prosecuted in the US, behind Bernie Madoff’s investor fraud, which came to light a few months earlier.
The case is Rotstain v. Trustmark National Bank et al, 4:22-cv-00800, US District Court, Southern District of Texas (Houston.
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