admin Dec 02, 2009 No Comments
Towards the end of September, a dispute arose between Lloyd’s underwriters and the appointed receiver of Stanford’s financial empire as to whether the underwriters should pay Stanford’s legal costs in relation to the charge against him of defrauding investors $7bn (£4.1bn), from a directors’ and officers’ liability policy purchased at Lloyd’s at Stanford International Bank. The underwriters originally said they would pay such costs under the contract terms and conditions, subject to them being reimbursed if Stanford was found guilty of fraud, but this was then challenged by the receiver, Ralph Janvey. He contended that the bulk of the policy coverage (reported to be $90m) should be used to reimburse Stanford’s companies for claims by investors and the associated legal costs. In mid-October the US district judge involved in the case ruled that Lloyd’s underwriters should pay Stanford’s legal costs as they originally proposed.
Investors and others are now taking legal action in significant numbers against those parties they believe to be potentially responsible for the global financial crisis and the economic downturn. Among those in the line are advisers who recommended investment in financial markets, such as those involving Madoff and Stanford and those involved in the mortgage market, including independent financial advisers, valuers, mortgage brokers and solicitors.