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(Alliance News) - HSBC Holdings PLC bosses on Thursday won a London court fight with the liquidators of a bank that used to be owned by an American financier who was handed a 110-year jail term.
Allen Stanford, now 71, was jailed by a judge in Houston, Texas, in 2012, after being convicted of orchestrating a 20-year investment fraud scheme in which he misappropriated USD7 billion from Stanford International Bank to finance his personal businesses.
Liquidators of Stanford International Bank, which was incorporated in Antigua, complained that HSBC bosses should have been quicker to freeze Stanford International accounts.
They said more than GBP115 million had been paid out between August 2008 and February 2009, when HSBC froze Stanford International accounts.
Lawyers argued that HSBC should have frozen accounts in August 2008 – and said such a move would have prevented about GBP80 million being paid out to holders of certificates of deposit issued by Stanford International.
But three Court of Appeal judges have dismissed the liquidators' claim for damages after HSBC bosses said payments had been made in discharge of "genuine debts".
Geoffrey Vos, Lord Justice Moylan and Lord Justice Arnold ruled in favour of HSBC on Thursday after considering arguments at a hearing in March.
They said in a written ruling that Stanford International had been used as a vehicle for "one of the largest and most prolonged Ponzi schemes in history".
HSBC bosses had appealed after a High Court judge, Justice Nugee, refused to "strike out" the liquidators' damages claim.
Justice Nugee had struck out a separate "dishonest assistance" claim made by liquidators against HSBC.
Stanford had links to English cricket.
In 2008, he had signed a deal with the England and Wales Cricket Board to play a series of Twenty20 matches in the Caribbean, worth a combined GBP10million, in an attempt to raise the profile of the game among young people in the area.
The following year he was charged with fraud.
In 2016, Stanford said an interview with BBC Sport, from his high-security prison in Florida, that he regretted the damage done to cricket.
By Brian Farmer, PA
source: PA
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