Financier Allen Stanford, accused of operating a $7 billion (4 billion pounds) Ponzi scheme, is mentally fit to stand trial, a judge ruled on Thursday.

U.S. District Judge David Hittner in Houston issued his ruling after three days of hearings on Stanford's competency.

Lawyers for Stanford, who was arrested in 2009, had argued that their client had suffered a traumatic brain injury from a jailhouse fight that caused severe memory loss. The memory loss made him unable to help prepare his defence, his lawyers said.

Prosecutors contended that Stanford may have faked amnesia and wanted his trial to start as scheduled in January.

(Reporting by Eileen O'Grady in Houston; Editing by Martha Graybow)