Texas firm sues Lloyd's over Stanford fees

A small Texas law firm has sued Lloyd's of London and its counsel at Akin Gump Strauss Hauer and Feld for allegedly blocking US$437,151 in legal fees for its work in representing indicted financier Allen Stanford in connection with a civil suit filed against him by the Securities and Exchange Commission (SEC).

The Sydow law firm is representing Stanford in federal securities litigation.

The firm claims that Akin Gump and certain underwriters at Lloyd's "agreed in writing" to pay Sydow to defend Stanford in the SEC suit.

Sydow received an initial payment of US$76,000 for its legal bills, but claims it is still owed the rest, according to its civil suit filed in Harris County District Court in Houston.

Akin Gump partner Daniel 'Neel' Lane, Jr, who is representing Lloyd's in insurance coverage litigation, declined to comment on the role of his client or his firm in the case.

Lloyd's holds insurance policies for Stanford Financial Group, the company that is accused of running a US$7-billion Ponzi scheme through the Antigua-based Stanford International Bank.

Last month, US district court judge Nancy Atlas ruled that Lloyd's and other insurers are not obligated to cover the cost of defending Stanford and former executives on criminal charges.

Stanford, who denies doing anything improper, has pleaded not guilty to the criminal charges. He remains in jail awaiting trial in January 2011.

- CMC