Quincecare and Dishonest Assistance: An Ongoing Retreat in Claims Against Banks?

Helen Pugh examines the Stanford International Bank Ltd Ponzi scheme as one of the latest examples of multi-jurisdictional fraud and the judgment for the claims brought by the liquidators of the Bank in an attempt to increase recoveries on behalf of the creditors.

Massive multi-jurisdictional fraud and the almost inevitable colossal insolvencies which follow have provided fertile ground for testing the scope of banker’s duties and liabilities in recent decades. Robert Allen Stanford’s eye-watering Ponzi scheme has been part of this trend.

On 15 April 2009 the Antiguan-incorporated Stanford International Bank Limited (“the Bank”) collapsed into insolvent liquidation bringing to an end one of the largest and most prolonged Ponzi schemes in history. For the depositors who lost their retirement income to the fraud it will be of little consolation that the Bank’s eponymous owner is currently serving a 110-year federal prison sentence for his instrumental role. Reports 10 years later suggested that only c.US$275million had been recovered and was available to meet creditor claims in excess of US$5billion.

Stanford International Bank Ltd (in liquidation) v HSBC Bank Plc [2021] EWCA Civ 535 is the latest decision in respect of claims brought by the liquidators of the Bank in an attempt to increase recoveries on behalf of the creditors. It will provide little source of encouragement to other victims of fraud seeking to mitigate their losses with claims against the fraudulent company’s bankers.

The full article

Helen examines the facts of Stanford International Bank Ltd (in liquidation) v HSBC Bank Plc [2021]. The full article can be read here.

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Helen Pugh is an established commercial and insolvency junior with experience of a broad range of matters including professional negligence, company and shareholder disputes, civil fraud, and arbitration.

Helen’s practice has a significant cross-border element and she frequently works with multi-jurisdictional teams. She provides an approachable and commercial service to clients.

To find out more about or to instruct Helen,  please contact Matt Sale (+44 (0)20 7427 4910) or Peter Foad (+44 (0)20 7427 0807) for a confidential discussion.

Legal Blogs 24 Jun, 2021