LONDON, Dec 21 (Reuters) – HSBC (HSBA.L) on Wednesday defeated a 116 million pound ($141 million) lawsuit in a London court docket over allegations the financial institution ought to have refused to make funds for convicted financier Allen Stanford.
The liquidators of Stanford Worldwide Financial institution argued HSBC missed “warning indicators” that the Antigua-based lender was a fraud earlier than it finally collapsed in February 2009.
In 2012, Stanford was sentenced to 110 years in jail in the USA for operating a $7 billion Ponzi scheme affecting roughly 18,000 former buyers.
Prosecutors stated Stanford offered fraudulent high-yielding certificates of deposit by Stanford Worldwide Financial institution and used investor cash to make dangerous investments and fund a lavish way of life within the Caribbean.
The liquidators introduced a civil case in London to get well 116 million kilos which was paid out of Stanford Worldwide Financial institution’s accounts with HSBC, earlier than being paid to Stanford Worldwide Financial institution’s clients in redemption funds and curiosity.
Their lawsuit was thrown out by the Courtroom of Attraction final yr and, on Wednesday, the UK’s Supreme Courtroom dismissed the liquidators’ enchantment by a four-to-one majority.
Asserting the court docket’s determination, Choose Vivien Rose stated the funds “don’t quantity to a recoverable loss as a result of the funds made relieved Stanford Worldwide Financial institution of 116 million kilos’ price of its contractual liabilities”.
She added that the financial institution’s property would have been the identical if the funds weren’t made as a result of “it will have 116 million kilos extra in money however it (would have) owed 116 million kilos extra in debt”.
An HSBC spokesperson stated in a press release: “HSBC is happy with the outcome however there isn’t a additional remark.”
Reporting by Sam Tobin
Enhancing by Mark Potter
: .