Testimony on Wednesday, at Allen Stanford's Ponzi trial, taking place in a Texas federal court, created a lot of buzz: Societe General had ties with Allen Stanford - going back to 12/16/08, when the global financial system was in disarray, Bernie Madoff gave himself up to police a week earlier, and U.S. authorities were zeroing in on Texas financier Allen Stanford. And, on that day, SocGen mysteriously debited $95 million from a Stanford Financial Group account at its private bank in Geneva, Switzerland. Exactly two months later, the SEC arrested Stanford on charges of running a $7 billion Ponzi scheme.  A court then ordered his global financial empire placed in receivership. Fast Forward Three Years, Ties Between Stanford and SocGen. Nearly 3 years after Stanford was arrested, the existence of the mysterious debit and the nature of the debit was brought up during Stanford's Ponzi trial - purportedly supported by documents that are included in the government’s evidence list, filed in court last month.  Stanford investors alleged in a lawsuit in December that SocGen took the money to satisfy a personal loan Stanford had taken out 4 years earlier.

“SG Suisse had a special, extensive, symbiotic and nefarious relationship with Stanford from which it greatly benefited,” the lawsuit says, alleging that by December 2008, bank officials “realized the Stanford Entities were insolvent,” and the bank wanted its money bank.  The investors claim the money belongs to them.

In the criminal case, prosecutors have alleged that the Swiss bank account, SocGen Account No. 108731, was a slush fund of sorts that Stanford used to pay bribes to regulators and his auditors, a charge Stanford’s attorneys have denied. It is not the only connection between Stanford and the bank. His personal banker, SocGen EVP Blaise Friedli, also served on Stanford’s international advisory board, the suit says. Societe Generale spokesman Joylon Barthorpe would not comment on the suit or media reports the bank itself is under investigation by U.S. prosecutors.  He added, "Societe Generale is cooperating with the Swiss and foreign authorities,” though he would not say whether Blaise Friedli, who has not been accused of wrongdoing, is still employed by the bank. At the Stanford trial in Houston, now in Week Two, the SocGen connection is expected to emerge during the testimony of former Stanford CFO James Davis, Stanford's college roommate and co-founder of the Stanford Financial.  Davis, as C-I reported on Tuesday, pleaded guilty to 3 criminal counts in 2009 and has been cooperating with authorities.  He could take the stand as soon as Wednesday afternoon. Defense attorneys have called Davis a liar who is fabricating stories about Stanford to save his own skin.  They also have claimed that Davis was responsible for the company’s operations, and that the firm only became insolvent after the SEC had it placed in receivership in 2009. For further details:  [CNBC.com, 2/1/12].