HSBC has won a London court case which saw it accused of missing “warning signs” when making payments on behalf of convicted fraudster and cricket entrepreneur Allen Stanford.
Stanford was a self-styled billionaire who infamously landed a helicopter at Lord’s when he flew in to complete a five-year financial deal with the ECB for a 20/20 cricket tournament in the West Indies.
Arguing HSBC should have refused the payments, liquidators of Stanford International Bank filed the lawsuit and suggested the London-listed bank had turned a “blind eye” to its real situation.
The payments, however, "do not amount to a recoverable loss because the payments made relieved Stanford International Bank of £116mln worth of its contractual liabilities," ruled Judge Vivien Rose.
HSBC said it was “pleased with the result”.
Rose suggested that HSBC’s assets would be unchanged had it not made the payments, as "it would have £116mln more in cash,” but then would have “owed £116mln more in debt".
Allen Stanford was sentenced to 110 years in US prisons in 2012 after running a US$7bn Ponzi scheme – where investors unknowingly make profits from other investors rather than legitimate business activity.
The liquidators had hoped to recover the £116mln through the court, but saw the case thrown out of the Court of Appeal last year and ultimately dismissed on Wednesday.