Members of the Stanford Victims Coalition from Louisiana and Texas are scheduled to meet today in Washington, D.C., with Mary L. Schapiro, head of the Securities and Exchange Commission.
They will ask Schapiro to require financial-industry coverage of billions in fraud losses allegedly caused by jailed Texas financier Robert Allen Stanford, John Wade of Folsom said Friday.
Wade is a partner in a small business that lost more than $1 million in pension funds in the Stanford case.
Members of Louisiana’s congressional delegation support the effort to help victims of the alleged fraud.
“I’m all for it,” U.S. Rep. Bill Cassidy said Friday.
Added Robert Sawicki, press secretary for U.S. Sen. Mary Landrieu: “Sen. Landrieu supports extending (this) protection to the victims of Allen Stanford’s Ponzi scheme.”
The coverage under discussion — up to $500,000 per investment account — repeatedly has been denied by the Securities Investor Protection Corp. since Stanford was indicted in Houston in June. Stanford remains in federal custody and faces trial in January on charges that he masterminded $7.2 billion in frauds against more than 25,000 investors around the world.
SIPC was created by Congress in 1970, but it is funded by member brokers and dealers across the nation.
The nonprofit corporation granted more than $500 million in coverage to fraud victims of confessed swindler Bernard Madoff of New York. Madoff is serving a 150-year prison term.
As many as 1,000 residents of the Baton Rouge, Lafayette and Covington areas lost as much as $1 billion to Stanford’s promotions, Baton Rouge lawyer Phillip W. Preis and state Rep. Bodi White, R-Central, have estimated.
And residents of other states have lost additional billions to Stanford, but SIPC repeatedly has refused to help them.
Wade said SEC and SIPC officials base that denial on the fact that most of Stanford’s investors lost money earmarked for his offshore Stanford International Bank.
Wade added, though, that he and many other investors sent their payments to Stanford Group Co., a member of SIPC, and bank statements show those funds were never sent to Stanford’s bank on the Caribbean island of Antigua.
“A lot of people didn’t even know they were dealing with Antigua,” Wade said. “They were dealing with Stanford Group Co. That’s our message.”
Preis, the Baton Rouge attorney who represents more than 100 Stanford investors, said the policy technically favors Schapiro’s and SIPC’s current stance against extending coverage to his clients.
But Preis noted that Schapiro easily could authorize an exception in the Stanford case.
“If Ms. Schapiro were to focus on who is more deserving between the Madoff and Stanford victims, she would have to conclude the Stanford victims are more deserving of SIPC coverage,” Preis added.
“Most of the Madoff victims were not retirees,” Preis said. “Most were very wealthy people.
“The Stanford victims, as a group, are smaller investors and retirees,” Preis said.
In November, Cassidy, R-La., spearheaded a request by the entire Louisiana congressional delegation and 40 other federal lawmakers for a directive from Schapiro that would require SIPC coverage.
“I am elated that the Stanford victims are having a chance to meet with Schapiro,” Cassidy said Friday.
In a written statement, Landrieu, D-La., added that she and 16 other senators are pushing a bill that would enable individual Stanford investors to deduct as much as $1.5 million of their losses from their income taxes.
“The massive fraud perpetrated by the Stanford Financial Group robbed people of their entire life savings and of their trust in our financial institutions and in our government’s capacity to regulate markets,” Landrieu said. “That’s why it is so important for us to act quickly in correcting this injustice.”
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