Lloyd's $100M D&O Policy Doesn't Cover Stanford's Legal Defense Bill in Ponzi Case, Judge Rules
Lloyd’s of London doesn’t have any obligation to cover onetime billionaire R. Allen Stanford’s criminal defense costs under a $100 million policy of directors and officers insurance for his company, a federal judge has ruled.
In a four-day trial in August the insurer proved, under a preponderance standard, that Stanford likely “knowingly committed acts of money laundering” concerning corporate funds, held U.S. District Judge Nancy Atlas in a 45-page written opinion today in the Houston case. Hence, under a policy exclusion that voids coverage if money-laundering occurs, Lloyd’s has no duty to defend Stanford, reports Bloomberg.
However, “the court does not reach the issue of whether the evidence supports a finding that Stanford personally engaged in criminal conduct,” Atlas wrote.
As detailed in earlier ABAJournal.com posts, Stanford is accused of operating a $7 billion Ponzi scheme under the guise of issuing certificates of deposit from an offshore bank he controlled.
He has pleaded not guilty.
ABAJournal.com: “Does $100M D&O Policy Require Lloyd’s to Pay Stanford’s Legal Bills? Federal Judge Will Decide”