View this article online: https://www.insurancejournal.com/news/international/2009/07/06/101952.htm
Several Mexican clients of Stanford Financial Group have sued insurance broker Willis Group Holdings Ltd, contending it was a willing participant in a $7 billion fraud at the Texas-based investment company.
The lawsuit, filed in federal court in Dallas, said Willis “crossed the line from being mere insurance brokers” to essentially acting as sales agents for Stanford.
The investors are seeking more than $1 billion in damages from Willis, which is domiciled in Bermuda and has large operations in New York and London.
[Reached today by Insurance Journal, Will Thoretz, Willis spokesman, declined comment on the suit.]
Stanford founder Allen Stanford, a Texas billionaire, and others face criminal and civil charges related to what U.S. federal prosecutors have called a $7 billion Ponzi scheme involving high-yielding certificates of deposits issued by his bank in Antigua.
Many Stanford customers were located throughout Latin America.
The lawsuit contends that Willis and other defendants provided Stanford Financial with certain “safe and soundness” letters that were intended to be used for marketing purposes to attract Stanford clients. Willis lent recognition and credibility to Stanford’s business, the lawsuit says.
The lawsuit was filed Thursday by law firms Strasburger & Price LLP and Castillo Snyder PC. “We intend to prove that the defendants willfully misrepresented the safety of the financial products offered by Stanford,” attorney David Cibrian, one of the lawyers who brought the case, said in a statement. The lawsuit seeks class-action status on behalf of other Stanford investors.
Stanford Financial has been under control of a court-appointed receiver since February, when the U.S. Securities and Exchange Commission sued Allen Stanford for civil fraud. Federal prosecutors brought criminal charges against him and others last month.
Stanford has been ordered held without bail until trial, currently set for August. He had spent the last 15 years living primarily in the Caribbean, where he was knighted by the Antiguan government.
(Reporting by Martha Graybow; Editing by Christian Wiessner)