A three-judge panel of the 5th U.S. Circuit Court of Appeals held March 15 that a court — not insurance companies — will determine whether two insurance companies have to pay defense costs for R. Allen Stanford and three other former Stanford Financial Group (SFG) executives who face criminal charges and civil litigation.
The civil litigation filed by the U.S. Securities and Exchange Commission and the federal criminal charges stem from allegations that the former SFG executives conspired to defraud investors who bought about $7 million in certificates of deposit sold through Stanford International Bank Ltd. The criminal case, United States v. Robert Allen Stanford, et al. is pending in U.S. District Judge David Hittner’s court in the Southern District of Texas in Houston. The civil case, Securities and Exchange Commission v. Stanford International Bank Ltd., et al., is pending before U.S. District Judge David Godbey of the Northern District of Texas in Dallas. Stanford and the other three executives, Laura Pendergest-Holt, Gilberto Lopez Jr. and Mark Kuhrt, have pleaded not guilty to the criminal charges against them and deny the allegations in the civil suit.
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