A U.S. federal judge ordered insurer Lloyd’s of London Tuesday to pay for alleged swindler Allen Stanford’s defense.
Stanford and three other defendants sued the insurer after Lloyd’s stopped providing coverage last year under a directors and officers policy, citing a money laundering exclusion.
“Without access to the funds for which plaintiffs duly contracted, through the Stanford entities, and upon which they relied, the court finds plaintiffs will be unable to mount the defense required in such complex cases as the criminal action and the SEC action,” U.S. District Judge David Hittner said in a 42-page order.
Lloyd’s must pay all costs and expenses that have been submitted within 10 days, the order said.
Stanford, his former chief investment officer Laura Holt and former accounting executives Gilbert Lopez and Mark Kuhrt and an Antiguan regulator face criminal and civil charges for for defrauding investors in a $7 billion Ponzi scheme involving certificates of deposit.
Stanford, 59, is in jail awaiting a January 2011 trial. Stanford, Holt, Kuhrt and Lopez have denied any wrongdoing.
The Lloyd’s case is Laura Pendergest-Holt, R. Allen Stanford, Gilbert Lopez and Mark Kuhrt v Certain Underwriters at Lloyd’s of London and Arch Specialty Insurance Co, U.S. District of Court, Southern District of Texas, No. 09-03712.
(Reporting by Anna Driver in Houston; editing by Andre Grenon)
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