Receiver Settles with Banks for $1.6B in Stanford Case, Firm Represents Investors Against Bank of Houston and Trustmark
March 8, 2023
With jury selection set to start over claims that several banks aided and abetted R. Allen Stanford and Stanford International Bank, Ltd. (SIBL) in perpetrating an $8 billion fraud, the second-largest Ponzi scheme on record, court-appointed Receiver Ralph S. Janvey and the Official Stanford Investors Committee (OSIC) announced settlements of $1.345 billion on Feb. 27, 2023.
The three banks facing trial, Toronto Dominion Bank, Independent Bank f/k/a Bank of Houston, and HSBC Bank, plc, agreed to pay defrauded investors $1.205 billion, $100 million, and $40 million, respectively. Co-defendants Trustmark National Bank ($100 million) and Société Générale Private Banking (Suisse) S.A. ($157 million) settled earlier this year.
Together, recoveries from the five banks amount to more than $1.6 billion, which—once approved by the Receivership Court in Dallas—will only add to the $1.1 billion already collected by the Receiver through litigation and other work on behalf of investors.
Fishman Haygood attorneys James R. “Jim” Swanson, Benjamin D. Reichard, Molly L. Wells, C. Hogan Paschal, and Lara K. Richards worked as part of a team concentrated on representing the plaintiffs in claims against Bank of Houston and Trustmark National Bank. Baker Botts and Castillo Snyder were co-counsel on the case.
Litigation in this matter began in 2009, when a group of investors filed a lawsuit alleging that the five banks knowingly participated in the multibillion-dollar Stanford Ponzi scheme. In 2012, R. Allen Stanford, chairman of SIBL’s board of directors, was sentenced to 110 years in federal prison for orchestrating the fraud. The banks deny any wrongdoing or liability in the matter.
“This has been a long time coming,” says Swanson of the settlements. “And we are very proud to have been a part of the team that brought this case to its successful end.”
Today the Receiver and OSIC filed motions to approve the settlement agreements in court overseeing the Stanford multi-district litigation, the Honorable David C. Godbey, Chief Judge of the United States District Court for the Northern District of Texas.
“This matter has been very hard-fought, and we are pleased to have reached this result,” says Reichard.
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