HSBC Gets Most of $163 Million Suit Over Ponzi Scheme Dismissed
(Bloomberg) -- HSBC Holdings Plc won a bid to throw out a substantial portion of a 118.5 million pound ($163 million) claim arising out of allegations it turned a “blind eye” to suspicious payments made by Stanford International Bank.
A London appeal court dismissed the central portions of the case Thursday. The only remaining part of the suit is a claim for 2.4 million pounds related to a payment made by HSBC to the English Cricket Board.
SIB, which was controlled by billionaire swindler R. Allen Stanford, sold billions of dollars in bogus certificates of deposit to more than 17,000 investors worldwide before it imploded in 2009. At the time, the plot was the second-largest Ponzi scheme prosecuted in the U.S., behind the Madoff investor fraud, which came to light a few months earlier.
HSBC, which operated four correspondent bank accounts for Stanford International, should have prevented the fraudulent transfers, according to administrators for SIB, who brought the suit.
SIB can’t claim that anyone at HSBC had the necessary dishonesty or blind eye knowledge of Stanford’s fraud or of the Ponzi scheme, the court said.
SIB’s administrators and HSBC didn’t immediately respond to a request for comment.
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