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Stanford CIO criminally indicted

Laura Pendergest-Holt, the chief investment officer for Stanford Financial Group, has been indicted by a Houston federal grand jury on charges of obstruction of justice and conspiracy to obstruct justice.

The case is the first criminal indictment to come out of the wide-ranging fraud investigation into the Houston-based banking and financial services network.

Prosecutor Gregg Costa asked US Judge Mary Milloy to issue a summons for Pendergest-Holt to appear in court. Pendergest-Holt is free on a $300,000 bond for a similar obstruction charge filed in February that accuses her of lying to, or failing to give information to, Securities and Exchange Commission (SEC) investigators in Dallas.

According to a press release from the Justice Department and FBI, Pendergest-Holt is alleged to have met with others in Miami to discuss how to respond to a SEC investigation into Stanford.

Pendergest-Holt is also in the D&O limelight at the moment because she has lodged a $45mn claim against her D&O insurers for coverage costs she says she is owed for her legal defence in SEC and criminal actions filed against her.

The writ - lodged in a Texas district court - claims the former executive is an insured under a D&O liability and company indemnity policy issued by Lloyd's insurers Brit Syndicate 2987, ACE Syndicate 2488, Limit (QBE) Syndicate 1886, Chaucer Syndicates 1084 and 1274, and Pembroke Syndicate 4000.

If found guilty of criminal charges, Pendergest-Holt would be unable to claim on any D&O policy under which she was insured.

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