Accounting giant BDO USA will pay $40 million to settle claims it knowingly participated in R. Allen Stanford's $7 billion Ponzi scheme.

Settlement terms were not disclosed in the May 15 federal court filing, in which BDO denied wrongdoing. The company said it agreed to pay the money to save "time and energy."

The Official Stanford Investors Committee sued the company in 2012 , claiming it repeatedly issued unqualified audit opinions for Stanford's annual financial statements that were critical to Stanford's apparent success.

Stanford was convicted in 2012 in Houston of selling phony certificates of deposit. He is serving 110 years in federal prison.

"BDO Seidman was never the auditor of Stanford International Bank (Ltd.), the entity where Robert Allen Stanford committed his fraud," the company said in a statement Thursday. "BDO audited an affiliated company whose financial statements are not alleged by plaintiffs to have contained any material misstatements. However, after almost four years of litigation and the likelihood of more to come, this settlement makes the most sense for our partnership given our relevant insurance coverage and the costs, as well as the loss of time and energy, associated with continuing this case."

Plaintiffs' attorney Edward Valdespino, with Strasburger & Price in San Antonio, said the previous largest award for Stanford Ponzi victims was $5 million.

"It's really the first significant settlement for the victims after six years," he told the San Antonio Express-News. "In the scheme of things, it's a small amount for each individual investor, but this is one of many lawsuits out there."

The plaintiffs claimed BDO USA played a significant role in weakening banking laws in Antigua, where Stanford based his Ponzi scheme.

When Antigua came under increased scrutiny from foreign regulators, Stanford formed a task force to rewrite the country's banking laws. The task force succeeded in weakening regulations, and in effectively eliminating the Stanford bank's Antiguan competitors, making Stanford the country's de facto offshore banking regulator.

"The smashing success of the Stanford task force and its misleading regulatory 'reforms' were rooted in its exclusive nine-person membership," the complaint stated. "Every firm represented on the Task Force provided crucial services to Stanford Financial Group, and every individual member of the Task Force was personally appointed by Stanford himself. ... BDO USA's partners and associates comprised nearly half of the Stanford Task Force's members, more than any other firm represented on the Task Force."

The key aim of the task force was to amend Antigua's Money Laundering Act to ensure that "fraud" and "false accounting" were not included as violations, investors said.

BDO USA allegedly had some of the most important responsibilities for this, reviewing and advising on Antigua's banking laws, and making recommendations to Antigua's regulatory authorities, including procedures for supervising and examining international banks.

The settlement comes three days after New Orleans-based law firm Adams & Reese and Baton Rouge-based Breazeale Sachse & Wilson, among others, agreed to pay Stanford's court-appointed receiver $5 million to settle claims they referred clients to the scheme and gave fake opinions to Antiguan banking authorities.

A federal judge in Dallas has ruled that accounting firm BDO USA's agreement to pay $40 million to victims of Allen Stanford's Ponzi scheme "is a fair settlement amount."

The settlement, approved Wednesday by U.S. District Judge David Godbey, is the largest recovery so far against third parties involved in the case. Stanford's Ponzi scheme defrauded about $7.5 billion from an estimated 20,000 investors around the world.

The scheme's average victim will receive $1,500 as part of this agreement, according to court documents.

Lawyers appointed to recover money for the victims say the BDO settlement provides a precedent that will lead to additional payments from other businesses that worked with Stanford and profited from his illegal activities.

Ed Valdespino, a lawyer representing the Official Stanford Investors Committee, said "many defendants have been waiting and watching to see if this case could be successfully settled" before they would ever consider settlement.

"It's going to put money in the pockets of the investors," added Valdespino, a partner in the San Antonio office of Strasburger & Price. "This will actually encourage additional settlements."

Valdespino said the parties reached a settlement proposal about a year ago, but it took time to "work out the mechanics" and allow dissatisfied investors ample opportunity to object to the terms. According to Valdespino, less than 1 percent of the investors objected to the settlement.

Godbey rejected claims by the objectors that $40 million was not nearly enough considering the size of the fraud.

"While the court notes the objectors' argument that the settlement amount represents a small fraction of the investors' losses, the court also gives weight to the fact that this amount was not settled on in a vacuum," Godbey wrote in his order.

The original lawsuit against BDO claimed the Chicago-based accounting firm's "cozy relationship" with Stanford contributed to the fraud.

Stanford, a former Houston investment banker, was convicted in 2012 of wire and mail fraud and is serving a 110-year prison sentence. The U.S. Securities and Exchange Commission obtained a $6.7 billion disgorgement order against his financial institution, Stanford International Bank.

BDO claimed in court documents that it never knew about and was never involved in any of Stanford's illegal activities.

In exchange for the $40 million, the firm will receive "a global release of all past, present and future claims against BDO arising from its relationship with Stanford," the order says.

Dallas lawyer Karl Dial, who led the case for BDO, could not be reached for comment.

BDO spokesman Jerry Walsh said the accounting firm is making no admission of wrongdoing with the settlement.

"BDO Seidman was never the auditor of Stanford International Bank, the entity where Robert Allen Stanford committed his fraud," the statement says. "BDO audited an affiliated company whose financial statements are not alleged by plaintiffs to have contained any material misstatements. However, after four years of litigation and the likelihood of more to come, this settlement makes the most sense for our partnership given our relevant insurance coverage and the costs, as well as the loss of time and energy, associated with continuing this case."

Dallas attorney Ralph Janvey was appointed as the Stanford Financial receiver in 2009. The receivership had distributed $47 million as of March 31 to victims who have filed claims, according to its most recent filing.

After reading the above please answer the following below

What did you find to be the most interesting aspects of this case?

What would you have done differently (if anything) in detecting this fraud?

How would modern technologies assist /or not in the detection/prevention of this fraud?