Feb 21 (Reuters) – Societe Generale SA (SOGN.PA) agreed to pay $157 million to settle a lawsuit accusing the French financial institution and a number of other different banks of contributing to imprisoned Ponzi schemer Allen Stanford’s estimated $7.2 billion fraud.
The payout was disclosed on Tuesday in a submitting in Houston federal courtroom, and requires a decide’s approval.
Cash would go to a court-appointed receiver who’s repaying victims of Stanford’s fraud, which was uncovered in Feb. 2009, two months after the arrest of Bernard Madoff.
Societe Generale denied wrongdoing, and settled to keep away from the burden, “very substantial expense” and danger of litigation, settlement papers present. About $42.5 million of the payout would cowl authorized charges and bills.
Three different lenders – HSBC Holdings Plc (HSBA.L), Toronto-Dominion Financial institution (TD.TO) and Impartial Financial institution, previously often known as Financial institution of Houston – face a scheduled Feb. 27 trial within the Houston courtroom over their very own relationships with Stanford.
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As soon as thought of a billionaire however later deemed indigent, Stanford, 72, is serving a 110-year jail sentence following his 2012 conviction for defrauding about 18,000 former buyers.
Prosecutors mentioned Stanford offered fraudulent high-yielding certificates of deposit by way of his Antigua-based Stanford Worldwide Financial institution, and used investor cash to make dangerous investments and fund a lavish life-style.
A committee representing buyers who purchased the CDs are accusing HSBC, TD and Impartial Financial institution of knowingly aiding the fraud, and are looking for compensatory and punitive damages.
The banks have denied wrongdoing, saying they offered routine providers to Stanford’s financial institution and didn’t learn about his fraud.
One other financial institution, Mississippi-based Trustmark Corp (TRMK.O), reached a $100 million settlement of comparable claims.
The case is Abbott et al v Trustmark Nationwide Financial institution et al, U.S. District Courtroom, Southern District of Texas, No. 22-00800.
Reporting by Jonathan Stempel in New York; Enhancing by Invoice Berkrot
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