Lloyds TSB in £64 million US court case

by Gill Montia

Story link: Lloyds TSB in £64 million US court case

Lloyds TSB has responded strongly to the news that US prosecutors have filed a £64 million lawsuit against the bank, accusing it of being instrumental in helping to launder the proceeds from a major securities fraud.

The bank has promised to defend itself vigorously, saying: “We do not believe there is any basis for this action so we are disappointed that the US Government has commenced proceedings”.

The case, in the civil court, is based on allegations that Lloyds TSB aided Lycourgos Kyprianou, the former chief executive of AremisSoft, the Nasdaq-listed software company, to launder tens of millions of dollars.

AremisSoft filed for bankruptcy in March 2002 and in June of that year, Mr Kyprianou was charged with securities fraud and money laundering offences.

The charges were based upon his alleged role in insider-trading activities that were aimed at artificially inflating AremisSoft’s share price.

The Banks of Cyprus is being charged alongside Lloyds TSB and is similarly protesting its innocence, stating that it “acted according to the law at all times”.

However, US prosecutors are seeking $162 million from the Bank of Cyprus in the same lawsuit.