HOUSTON (Reuters) - Laura Holt, the former chief investment officer for accused Ponzi schemer Allen Stanford's financial firm, has reached a settlement with Lloyd's of London over her defence fees, a US federal judge said yesterday.

"Ms. Holt is not here," US District Judge Nancy Atlas said at a hearing in Houston. "It is my understanding that she has reached a settlement with the underwriters."

Stanford, Holt and two other defendants who are accused of a $7 billion Ponzi scheme sued Lloyd's, saying they are entitled to defence fees under a directors and officers policy.

Lloyd's has said it should not pay, citing a money laundering clause in the policy. Hearings the matter are scheduled for most of this week.