Lawmakers want banks punished over massive Ponzi scheme

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Lawmakers are asking a top federal regulator to crack down on several banks connected to a mid-2000s Ponzi scheme, arguing the government hasn’t done enough to get victims compensation.

The lawmakers called on the Office of the Comptroller of the Currency (OCC) to punish several banks for holding funds for Allen Stanford, convicted in 2012 of running the second-largest Ponzi scheme in United States history.

In a letter to acting Comptroller Keith Noreika dated Aug. 8, Reps. Roger Williams (R-Texas), Bill Posey (R-Fla.), Charlie Crist (D-Fla.) and Vicente González (D-Texas) asked the OCC to update them on efforts to hold the banks accountable, compensate victims and prevent similar schemes from happening again.

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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum http://sivg.org.ag/



Grant Thornton Update to Creditors June 2016

In an effort to keep you informed, below are some of the actives the Joint Liquidators have been working on since the filing of our last report.

The Creditors Advisory Committee
The CAC has been re-formed and a meeting was held recently to discuss the current status of the liquidation and its future plans. Some of the salient initiatives are listed below.

TD Bank Litigation 
TD has filed its Amended Statement of Defense and the JLs are in the process of preparing and finalizing our Reply. Meanwhile, the estate is pushing for the commencement of production and discovery proceedings. We have also been working closely with US Class Counsel to advance and coordinate the bank claims.

Law Firm Claims 
We are continuing to prosecute the claims against the law firms in Antigua. It is expected that hearings on the jurisdictional issues will be heard towards the end of this year

HSBC Claims 
HSBC agreed to provide disclosure on an agreed list of requests. In our view this issue has not been fully complied with. It has also become clear that we need to examine individuals, a position to which HSBC has yet to agree. Our current tolling agreement extending the time for filing expires on 30 June. Thus, we are of the view that we need to invoke S236 for proper production and examination. We anticipate our request to be contested.

Based on the information we have to date, we suspect that there were deficiencies in procedures by the bank and that certain “red flags” existed. We are working closely with our advisors to develop the case……………………..

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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum http://sivg.org.ag/



Law Firms, Banks Face Fallout from Stanford Ponzi Investors

Convicted financier R. Allen Stanford arrives at the Bob Casey Federal Courthouse for sentencing in Houston, Texas, U.S., on Thursday, June 14, 2012. Stanford, found guilty of leading a $7 billion international fraud scheme by a U.S. jury, will spend the rest of his life in prison if a federal judge grants prosecutors? request. Photographer: Aaron M. Sprecher/Bloomberg via Getty Images

For years, investors in R. Allen Stanford’s $7 billion Ponzi scheme have been struggling to eke out any significant recoveries. But things are looking up for Stanford’s 21,000 global investors, not to mention for the lawyers representing them on a contingency basis.

Unable to knock out a series of investor suits, four banks and four former law firms that serviced Stanford’s business empire are increasingly feeling the pressure from plaintiffs asserting billions of dollars in claims. As the defendants fight to overturn their courtroom losses—and to find out if they must face the plaintiffs as a class—counsel for the investors are now enjoying the advantage.

In early 2012, three years after the Stanford fraud was exposed, the investors’ position appeared far weaker. Court-appointed Stanford receiver Ralph Janvey and his counsel at Baker Botts had recovered just 3 cents for each dollar lost, with nearly half going toward professional fees. By contrast, in his first two years on the job, Irving Picard, the liquidation trustee for Bernard L. Madoff Investment Securities, had already recovered $7.2 billion from the widow of Madoff investor Jeffry Picower, and $3 billion from others.

“We never had a Mrs. Picower,” said Butzel Long partner Peter Morgenstern, cocounsel in a Stanford investor class action against TD Bank, HSBC, Societe General and two smaller Texas banks that collectively processed billions of dollars of transactions for Stanford’s sham businesses.

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Judge allows case against Stanford banks to go on

A federal judge in Dallas has upheld most of the claims in a major lawsuit against five banks accused of playing a role in Texas financier Allen Stanford’s massive Ponzi scheme.

Tuesday’s ruling by U.S. District Judge David Godbey means the suit filed in 2009 on behalf of thousands of Stanford victims can proceed against the banks, which include HSBC, Societe Generale, Toronto Dominion Bank, Trustmark National Bank and the Bank of Houston. The suit accuses the banks of playing “an essential role” in the $7 billion fraud, which each bank has denied.

While Godbey threw out some of the claims the victims were pursuing under Texas state law, the ruling allows the bulk of the case to move forward in federal court. That is important to the more than 20,000 Stanford victims, because unlike victims of the Bernard Madoff Ponzi scheme uncovered just two months earlier, they have recovered almost nothing. Also, while the Justice Department and federal authorities reached a $2 billion settlement last year with Madoff’s primary banker, JPMorgan Chase, they have thus far declined to pursue similar cases against Stanford’s bankers. That means that for Stanford’s victims, this civil case may be one of their last remaining hopes for a meaningful recovery.

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Bernard Madoff, Allen Stanford fraud victims refused appeals by US top court

Victims of the Ponzi schemes of Bernard Madoff and Allen  Stanford, two of the largest in US history, suffered setbacks on  Monday as the US Supreme Court refused to hear appeals in  two cases seeking to recoup more money for them

Victims of the Ponzi schemes of Bernard Madoff and Allen Stanford, two of the largest in US history, suffered setbacks on Monday as the US Supreme Court refused to hear appeals in two cases seeking to recoup more money for them

 

Victims of the Ponzi schemes of Bernard Madoff and Allen Stanford, two of the largest in US history, suffered setbacks on Monday as the USSupreme Court refused to hear appeals in two cases seeking to recoup more money for them.

 

In the Madoff case, the court rejected a request by Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, to review the dismissal of his claims against banks he accused of enabling Madoff’s fraud.

 

Separately, the court rejected a request by Ralph Janvey, a receiver unwinding Stanford’s businesses, to review a ruling that blocked him from pursuing claims against Stanford employees on behalf of the receivership’s creditors, not the businesses themselves. In both cases, lower courts concluded that Picard and Janvey lacked standing to bring their respective claims.

The Supreme Court did not give reasons for its decisions, which leave intact a June 2013 ruling in the Madoff case by the federal appeals court in New York, and an August 2013 ruling in the Stanford case by the federal appeals court in New Orleans.

Representatives for Picard and Janvey were not immediately available to comment. Picard has recovered about $9.82 billion for former Madoff customers, who he has estimated lost $17.5 billion of principal in a decades-long fraud uncovered in December 2008. A Ponzi scheme is one in which the early investors are usually paid high returns using money from later investors.

Picard had sued banks including JPMorgan Chase & Co, Britain’s HSBC Holdings Plc, Italy’s UniCredit SpA and Switzerland’s UBS AG over their dealings with Madoff. JPMorgan, which was Madoff’s main bank, was dropped from the case after reaching a $325 million settlement with Picard in January, part of a $2.6 billion global resolution of federal and private Madoff claims.

Stanford’s estimated $7.2 billion fraud was based on the sale of bogus certificates of deposit issued by Antigua-based Stanford International Bank to customers who thought the CDs were safe. The Ponzi scheme was uncovered in February 2009.

Janvey won court approval for an initial $55 million distribution to CD investors in April 2013. Madoff, 76, is serving a 150-year prison term after pleading guilty in March 2009. Stanford, 64, is serving a 110-year term following his jury conviction in March 2012. The cases are Picard v JPMorgan Chase & Co et al, USSupreme Court, No. 13-448; and Janvey v Alguire et al, USSupreme Court, No. 13-913.

 

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For a full and open debate on the Stanford receivership visit the Stanford International Victims Group – SIVG official Forum http://sivg.org.ag/