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Alleged Texas Fraudster Loses Defense Costs From Lloyd's, Arch

Lloyd's and Arch Specialty Insurance Co. do not have to cover the legal expenses of Texas financier R. Allen Stanford, a federal judge ruled last month.

By Chad Hemenway | Updated on November 07, 2010

Lloyd’s and Arch Specialty Insurance Co. do not have to cover the legal expenses of Texas financier R. Allen Stanford, a federal judge ruled last month.

According to court documents from the U.S. District Court in Houston, Judge Nancy F. Atlas has ruled the insurers “have met their burden to show a substantial likelihood that the preponderance of the evidence would demonstrate that the money laundering exclusion applies” and the insurers do not have to provide coverage for defense costs.

Mr. Stanford is accused of bilking investors of $7 billion in an alleged Ponzi scheme. He and several executives of his Stanford Financial Group Co. were indicted last year in Houston on charges of fraud, conspiracy, bribery and other charges.

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