Laura Pendergest-Holt has settled with insurer Lloyd's of London over paying to defend herself on charges she was involved with the international scandal that took down Stanford Financial Group.

Tuesday, U.S. District Judge Nancy Atlas told her Houston, Texas, courtroom about Holt's settlement, but neither she nor Holt's attorneys gave any other details.

Holt, a Baldwyn native, was Stanford's chief investment officer when the financial empire collapsed in 2009 under the weight of a federal investigation.

Holt, former CEO R. Allen Stanford and two others sued Lloyd's to force payment of millions in legal fees they've incurred defending themselves against criminal charges that they masterminded a $7.2 billion Ponzi scheme against Stanford investors.

Lloyd's has been paying their lawyers under an insurance policy that covered officers and directors of Houston-based SFG. Lloyd's alleges it shouldn't have to pay any more because the indictment against the defendants includes money laundering charges that Lloyd's says aren't covered.

The other executives, like Holt, claim they are innocent.

The Houston Chronicle reported Stanford's lawyer told the court his client wasn't directly involved in his company's finances and didn't do anything that should void an insurance policy covering his legal fees.

Federal indictments last year named Stanford, Holt, chief accountant Gil Lopez and global controller Mark Kuhrt, accusing them of a scheme involving certificates of deposit issued by a Stanford-operated bank on the Caribbean island of Antigua.

A fifth defendant, former Antiguan banking regulator Leroy King, is fighting extradition.

Another Baldwyn native, James M. Davis, was charged separately and pleaded guilty in August 2009. Now living in Michigan, he is expected to testify against the others in criminal trials set in 2011. Davis was SFG's chief financial officer and Stanford's right-hand man.

Stanford's lawyer, Robert S. Bennett, told the court Tuesday that Stanford believed he was running a legitimate business and relied on financial reports provided by others.

Stanford has been in federal detention since last year because U.S. District Judge David Hittner deemed him a flight risk. The other defendants are free on bail.

Contact Patsy R. Brumfield at (662) 678-1596 or patsy.brumfield@djournal.com.