Proactive Investors - HSBC is set to go to trial next Monday in Houston to uncover its relationship with infamous Ponzi schemer Allen Stanford.
The UK-listed bank is one of three lenders which faced scrutiny over its relationship with 72-year-old Stanford.
French bank Societe Generale, which was also accused of contributing towards Stanford’s US$7.2bn fraud has agreed to pay US$157mln to settle the lawsuit in the latest development.
The pay-out, which was disclosed in a filing in a Houston federal court, still requires the approval of a judge.
If approved, the money would go to a court-appointed receiver, who will in turn repay the victims of the fraud which was uncovered in 2009, just two months after the arrest of Bernie Madoff.
Societe Generale insists it did not partake in any wrongdoing and settled to avoid the financial burden and substantial risk of litigation.
Stanford is currently serving a 110-year sentence after being convicted of fraud in 2012.
Often dubbed the cricket fraudster for starting and funding the Stanford 20/20 cricket tournament in the West Indies, he defrauded clients of nearly US$7.2bn.
Companies under his control were reportedly engaged in bribery, money laundering and political manipulation.
Stanford would also allegedly pitch to would-be investors with hypothetical results and pass them off as historical sales data.
Following an investigation by the SEC, FBI and other bodies into Stanford Financial Group, he was taken into custody in June 2009 before beginning sentenced to 110 years imprisonment in June 2012.