HSBC wins $141 million lawsuit in UK Supreme Court | Daily News Byte


LONDON, Dec 21 (Reuters) – HSBC ( HSBA.L ) on Wednesday defeated a 116 million pound ($141 million) lawsuit in a London court over allegations that the bank refused to pay for convicted financier Alan Stanford.

Stanford International Bank’s liquidators argued that HSBC missed “warning signs” that the Antigua-based lender was a fraud before it finally collapsed in February 2009.

In 2012, Stanford was sentenced to 110 years in prison in the United States for running a $7 billion Ponzi scheme that affected approximately 18,000 former investors.

Prosecutors said Stanford sold fraudulent high-yield certificates of deposit through Stanford International Bank and used investors’ money to make risky investments and fund lavish lifestyles in the Caribbean.

The liquidators brought a civil case in London to recover 116 million pounds that were paid out of Stanford International Bank’s accounts with HSBC before redemption payments and interest were paid to customers of Stanford International Bank.

Their lawsuit was thrown out by the Court of Appeal last year and on Wednesday, the United Kingdom’s Supreme Court dismissed the liquidators’ appeal by a four-to-one majority.

Announcing the court’s decision, Judge Vivian Rose said the payments “did not amount to recoverable damages as the payments relieved Stanford International Bank of £116 million of its contractual obligations”.

She added that if the payments had not been made the bank’s assets would have been the same as “it would have had £116m more cash but £116m more in debt”.

An HSBC spokesman said in a statement: “HSBC is satisfied with the outcome but has no further comment.”

Reporting by Sam Tobin Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.


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