Disgruntled investors are suing the Bank of Bermuda's Guernsey branch for 10 million ($16 million), a British investigative magazine has claimed.

And the bank has already paid out-of-court settlements to several other investors to prevent any unwelcome publicity or scandal, the report alleged.

But a spokeswoman from the bank last night defended its actions -- and she claimed the magazine had been `misinformed' on details.

The case could be very embarrassing if it proceeds to the British High Court in June when it is understood to be scheduled.

It reportedly dates back to August 1992 when seven people -- including several retired bankers and accountants -- clubbed together to deposit their life savings with the bank.

The magazine, Private Eye, suggests that three months after making their investment the group were told that not only had the entire $1.6 million been lost but they also owed the bank another $1.3 million.

They had apparently agreed that their funds could be traded on movements in foreign exchange but expected to be kept informed of any deals in which their money was invested.

After their money dried up so suddenly they asked for details of the bad deals which had led to their financial ruin but were told nothing, the report claimed.

It went on to say that within months the chief dealer at the bank was sacked in "mysterious circumstances''.

One of the investors was retired accountant Christopher Reynolds who has since sued the bank alleging deception.

Private Eye reported that the Bank of Bermuda eventually settled out of court with Reynolds in December 1996, paying him $240,000 for the $160,000 he had invested four years earlier plus interest.

Reynolds died of cancer three months after the lengthy legal battle was brought to an end with the payment.

The magazine reported another of the investors had threatened to reveal details of the loss to the media and was paid off with a $142,400 out-of-court settlement to again cover his full investment plus interest.

Now the case for the remaining five investors who are together claiming $16 million has apparently been set down for a hearing in the London high court in June.

When The Royal Gazette contacted the Bank of Bermuda last night, the spokeswoman was fully aware of the case.

She said: "We regret that Private Eye has on this occasion been misinformed as to the detail of what is quite a complex matter.

"For reasons of customer confidentiality, Bank of Bermuda cannot comment on specifics but is confident that it has acted properly and in good faith throughout.

"Further the Bank has ensured that the local regulators (in Guernsey) have been kept fully informed on a regular basis.'' COURTS CTS