UPDATE 1-U.S. SEC won’t appeal ruling against Stanford’s Ponzi victims

The U.S. Securities and Exchange Commission will not appeal a recent court decision that thousands of victims of financier Allen Stanford’s Ponzi scheme were ineligible under federal law to file claims to recoup their losses, an SEC spokesman said on Friday.

On July 18, a federal appeals court in Washington rejected the SEC’s bid to force the Securities Investor Protection Corp (SIPC) to start paying an estimated 7,800 former customers of Stanford Group Co.

The court concluded that these victims did not qualify as “customers” eligible for compensation by SIPC, which liquidates failed brokerages. It upheld a July 2012 ruling by a federal district judge.

SEC spokesman John Nester on Friday said in an email that the regulatory agency decided “after very careful deliberation” not to pursue the case further.

He also said the SEC remains committed to Stanford’s victims, and will work with the Stanford firm’s receiver, the U.S. Department of Justice and others to maximize recoveries.

Stanford, 64, is serving a 110-year prison term following his March 2012 conviction for running an estimated $7.2 billion fraud.

The scheme was centered on bilking investors with fraudulent certificates of deposit issued by his Antigua-based Stanford International Bank.

Angela Shaw Kogutt, founder of the Stanford Victims Coalition, called the SEC decision “a complete injustice” to Stanford victims.

“Unfortunately, Stanford victims have no private right of action against SIPC,” she said in an email. “The Commission has caved to an organization it is supposed to oversee.”

The case had been the first time the SEC had sued to force SIPC to start a court-supervised liquidation.

While the SIPC has handled other big liquidations, including that of Bernard Madoff’s former firm, it contended that Stanford’s customers did not qualify for help because the Antigua bank was not a member of SIPC, unlike Texas-based Stanford Group.

In ruling for SIPC, Circuit Judge Sri Srinivasan had written for the appeals court that “we fully agree” with the district court judge, who expressed that he had been “‘truly sympathetic to the plight’ of the victims.” (Editing by Meredith Mazzilli and Jonathan Oatis)

Read more here:

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




Advertisements

Will SIPC’s Brokerage Insurance Scam Help Allen Stanford Walk?

If you experience an insured loss and the insurance company doesn’t pay, you know you’ve been scammed. As I’ve discussed in a series of columns posted at http://www.kotlikoff.net, SIPC (the Securities Investor Protection Corporation) is running an enormous scam in claiming to insure our brokerage accounts against fraud. SIPC’s refusal to pay the legitimate claims of most Madoff victims and all Stanford victims makes this abundantly clear.

Even worse, SIPC is placing all brokerage account holders at enormous additional risk by standing ready to sue them if they earn a return on their investments and spend the proceeds. In fact, thanks to precedents SIPC established in the Madoff case, SIPC can declare the loss of your securities to be the result of a Ponzi scheme and sue you for up to every dollar you withdrew in the up to six years prior to the fraud’s discovery!

Reread that last sentence. It is saying that if you have made money investing with a broker, directly or indirectly, say through your IRA, you can not safely spend (or, indeed, withdraw and reinvest) your assets for up to six years from the time you’ve withdrawn them! But it is even worse than this. When you withdraw money from your IRA, you have to pay up to 40 percent in taxes. You can be sued for the amount you pay the IRS in taxes as well!

Read the full article here:

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



Kachroo Legal Services Update on SEC Lawsuit

TO ALL SEC CLIENTS
February 26, 2014

Zelaya et al v. United States of America

Dear Stanford/SEC Clients: We write to update you with respect to important information regarding the claim against the Securities and Exchange Commission.

To read the complete update from Kachroo Legal Services Click Here:

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

 

Kachroo Legal Services Update on Stanford Further Actions

TO ALL SFA CLIENTS

STANFORD FURTHER ACTIONS

Dear Stanford Clients:

We write to update you with respect to important information regarding customer claims with the Stanford Liquidator in Antigua and Receiver in Dallas.

To read the complete update from Kachroo Legal Services Click Here:

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

 

JPMorgan to pay victims of Madoff fraud

US federal authorities say JPMorgan Chase, the primary bank used by the jailed investor Bernard Madoff to run dubious pyramid schemes, has agreed to play $1.7 billion to settle victims’ claims.

jpmorgan

The US attorney of the southern district of New York said Tuesday that the bank JPMorgan Chase would pay $1.7 billion to settle charges that it violated laws requiring banks to monitor customer activity for money laundering.

The deal includes a two-year deferment of prosecution against the bank. No individual executives were accused of wrongdoing.

Madoff, 75, who is currently serving a 150-year prison term, was arrested in 2008 as his hedge fund business fell apart amid the global financial crisis.

He was convicted in 2009 of defrauding investors.

Using so-called Ponzi schemes, Madoff relied on new cash intakes to pay clients cashing out. Hundreds of clients – ranging from celebrities to ordinary savers – lost their holdings.

The federal prosecutions statement said under the deal JPMorgan Chase would pay the fine to victims of Madoff’s fraud, admit to its conduct, and had agreed to upgrade operations to prevent money laundering.

The bank had agreed not to apply for a tax deduction or tax credit for the $1.7 billion payment.

In exchange, criminal charges would be deferred for two years.

JPMorgan did not immediately comment on the settlement. It shares fell 55 cents to $58.45 in morning trading Tuesday.

 

Join the Debate: http://sivg.org.ag/topic254.html

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