Certain Stanford Investors Get Some SEC Support

Source:247wallst.com

It looks like at least some of the investors who were screwed by Stanford may get to recover some assets. This is not meant to be a catch-all recovery nor for all investors, at least not the way we have read into a release from the SEC today. The news release from the Securities and Exchange Commission concluded that “certain individuals who invested money through the Stanford Group Company – a U.S. broker-dealer owned and used by Allen Stanford to perpetrate a massive Ponzi scheme – are entitled to the protections of the Securities Investor Protection Act of 1970 (SIPA).”

Before thinking this encompasses all assets for all customers, that might not be the case. The SEC went on to note, “on the specific facts of this case, investors with brokerage accounts at SGC who purchased the CDs through the broker-dealer qualify for protected “customer” status under SIPA.” This covers Stanford Group Company that was owned by Allen Stanford “to perpetrate a massive Ponzi scheme.”

Today’s news out of the SEC noted that these investors were sold certificates of deposit, or CDs, which were issued by Stanford International Bank Ltd. through the Stanford Group Company, and Stanford Group Company is a SIPC Member.

The SEC determined that customers’ claims should be based on their net investment in the fraudulent CDs used to carry out the Ponzi scheme. A SIPA liquidation proceeding would allow investors with accounts at SGC to file claims with a trustee selected by SIPC. Unfortunately for investors, it appears to be up to the trustee to decide whether investors have customer claims protected by a statute. Those who disagree with the trustee’s determination could seek a court review.

Lastly, the SEC noted, “The Commission has authorized its staff to file an action in federal district court under SIPA to compel SIPC to initiate a liquidation proceeding in the event SIPC does not do so.”


The SEC also provided a massive support document titled ANALYSIS OF SECURITIES INVESTOR PROTECTION ACT COVERAGE FOR STANFORD GROUP COMPANY.


What this translates to certainly does not sound immediately like a full restitution. The analysis in the formal letter from the SEC to SIPC noted that the SEC “is making a formal request to the SIPC Board of Directors to take the necessary steps to institute a SIPA liquidation proceeding of SGC. Should the Board refuse to take such action, the Commission has authorized its Division of Enforcement to bring an action in district court against SIPC to compel the institution of a proceeding to liquidate SGC under SIPA.”

A separate release from SIPC noted, “The Securities Investor Protection Corporation (“SIPC”), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, said that it will analyze the referral provided today by the U.S. Securities and Exchange Commission (“SEC”) with respect to the Stanford Group Company, operated by Robert Allen Stanford.”

Unfortunately, this is one of those situations that caught many investors off balance and has killed more than a few fortunes. Any and all Stanford investors will want to look far deeper than the amount of coverage we can give to this tragic topic.

All International Victims need to read this and comment!!

I have attached a link that all International victims should go to and add a comment. You will see that there are comments from some victims lucky enough to be eligible for SIPC.

This site is being read by Congressman Culbertson and we can use the comment space to make him aware of what the cost of SIPC will be to all the International Victims. We now have to start our own campaign to make sure the coverage of SIPC is extended to include each and every one of us because WE are going to be the ones repaying SIPC for every investor they give money to. I have already heard rumours that SIPC are looking at the assets in Antigua, Switzerland and the UK. This is our money and it is all we have (Janvey has next to nothing). If SIPC are targeting ALL the assets, then they have to pay ALL of the victims.

WE have a new battle on our hands and we need to start making a noise and making sure that not just Congressman Culbertson but all the newspapers are told the true cost of this proposal to the majority of victims.

Here is the link, please go it it and start posting comments:

http://www.texasinsider.org/?p=48593&cpage=1#comment-47938

Letter to the editor HOUSTON CHRONICLE

March 14, 2011, 9:27PM

Agencies failed

It has been more than two years since 1,290 Texans lost their life savings in the R. Allen Stanford debacle. Many of the victims were teachers, nurses and firefighters, and these losses reflect most, if not all, of the retirement funds they accumulated over many years of hard work. These Texans relied on the Securities Exchange Commission (SEC) to uphold its federal mandate to protect investors, and despite numerous warnings about Stanford Financial over several years, the SEC failed to act on behalf of investors.

In 2010, SEC Inspector General David Kotz revealed the SEC was aware as early as 1997 that Stanford investors’ funds were in jeopardy of being stolen. It wasn’t until 2004 — seven years after the SEC first became aware of problems at Stanford — that it opened an official investigation. By the time the SEC took action in this case, it was too late for the Stanford victims who had lost virtually everything.

To make matters worse, the Stanford investors were customers of Stanford Group Co. (SGC), a broker-dealer that was a member of the Securities Investor Protection Corp.(SIPC). SIPC allowed SGC to use its seal for brochures, promotional materials and correspondence to give investors additional confidence. “Member SIPC” was adorned on its correspondences to investors, yet to date SIPC, which is under SEC authority, has refused to provide any remedy for Stanford victims. Customers of the Stanford broker dealer have been denied coverage, despite previous cases where investors in similar situations were covered. Skip Swingle, a victim of SGC, aptly warned, “I don’t think it’s just Stanford victims that should be concerned about what’s going on, but everybody.”

On Monday I sent a letter to SEC Chairman Mary Schapiro asking again for an expedited review of this issue. No one can restore all that these victims lost. We cannot replace the trust that was violated, nor can we say that this fraud won’t happen again. What the SEC and SIPC can and should do is live up to the mandate of encouraging investment by establishing customer confidence. If they do not, brokerage firms across the country might reconsider the placement of the SIPC seal, and investors will see it as a symbol of caution, not protection.

— U.S. REP. JOHN CULBERSON,
7th Congressional District of Texas

Financier Allen Stanford seeks release from jail

NEW ORLEANS — Lawyers for jailed Texas financier R. Allen Stanford said his right to a speedy trial after his 2009 indictment have been violated and they asked a federal appeals court Wednesday to let him go free on bond as he awaits trial in what prosecutors said was a huge Ponzi scheme.

A federal prosecutor said delays have been for legitimate reasons, including time needed to find a co-defendant, and Stanford's own request for a continuance to prepare for a complex trial.

"Mr. Stanford is responsible for every single bit of the delay that he now says makes him eligible for release," Assistant U.S. Attorney Gregg Costa told the three-judge panel of the 5th U.S. Circuit Court of Appeals.

The panel, including the 5th Circuit's chief judge, Edith Jones, gave no indication when it would rule.

Stanford and others face a variety of federal charges in Houston federal court, including mail fraud, wire fraud and conspiracy in what prosecutors say was a $7 billion pyramid scheme. A trial date is currently on hold while Stanford undergoes treatment for an anti-anxiety drug addiction.

Both sides agreed that continuances have been necessary due to the complexity of the case. The defense, however, argued in briefs and in Wednesday's hearing that the federal district judge in the case erred in failing to allow bond for Stanford. The speedy trial act, they said, requires trial within 90 days of arrest. It makes allowances for various delays that have the effect of suspending the 90-day period, but defense attorneys argued that the judge did not make the required findings of fact in court to justify continued custody of Stanford.

Court appointed defense lawyer Ali Fazel told the 5th Circuit that Stanford should be released from Bureau of Prisons custody so that he can begin to aide his defense attorneys while he undergoes drug treatment.

Costa noted that this is not Stanford's first attempt to win release. U.S. District Judge David Hittner has previously determined that Stanford is a flight risk.

Stanford's trial had been set to begin on Jan. 24 but Hittner agreed to delay its start until the financier can be treated for several medical problems affecting his competency.

Psychiatrists testified in January in Houston that Stanford was suffering a major depression and is dealing with the untreated aftereffects of a traumatic brain injury suffered during a jail fight in September 2009. They also said Stanford was being overmedicated for his depression and became addicted to an anti-anxiety medication called Clonazepam.

Stanford's attorneys have asked for at least a two-year delay to deal with his medical problems as well as various legal issues related to getting ready for trial. Prosecutors, who agree a delay is needed, have said two years is unreasonable.

After losing a bid last year to have an insurance policy cover his legal fees, Stanford is now considered an indigent defendant and has to rely on court appointed attorneys.

Allen Stanford Receiver to Argue for SocGen Subpoena Feb. 28

Lawyers for R. Allen Stanford’s U.S. court-appointed receiver are scheduled to appear with those for a Societe Generale unit before a federal judge to resolve a dispute over subpoenaed records.

U.S. District Judge David Godbey in Dallas set a hearing for Feb. 28 to address the disagreement between the Lausanne, Switzerland-based unit of the Paris-based bank and the receivership overseeing the indicted financier’s businesses.

Citing Swiss banking secrecy laws, Societe Generale Private Banking (Suisse) SA has objected to receiver Ralph Janvey’s Dec. 13 subpoena demanding that the bank turn over all of its records after Jan. 1, 2000, for accounts held by Stanford personally or by his businesses.

“Production of the requested documents would force SG Suisse and its officers and employees to violate Swiss substantive law,” including laws prohibiting the release of the type of records Janvey seeks, the bank said in a Feb. 7 court filing.

Stanford, 60, is civilly and criminally accused by the U.S. of leading a $7 billion investment-fraud scheme through the sale of certificates of deposit by his Antigua-based Stanford International Bank Ltd. He has denied any wrongdoing.

The U.S. Securities and Exchange Commission filed its enforcement proceeding against the Texas financier two years ago Feb. 18. The receivership is recovering money to repay Stanford’s investors and creditors.

The SEC case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston).

Stanford International Victims group are today receiving notification that their claims against the SEC have been registered.

Victims of the alleged Allen Stanford Ponzi Scheme have today started to receive notifications from Kachroo Legal Services (KLS) confirming that their Administration claims have been filed with the U.S Securities and Exchange Commission.


Kachroo Legal services say that it may take a few days to notify all the victims that signed up with them but the claims have already been presented to the SEC.


Victims now have to wait for a response from the SEC – which could take up to 6 months – after such time KLS will (dependant on the response they receive) then set the wheels in motion for a class action lawsuit to make the SEC accountable and liable for the losses suffered by the victims who have filed claims.


The SEC knew as far back as 1997 that Stanford was “In all probability running a Ponzi scheme” but chose to sit back and do nothing while thousands of innocent victims paid their money into SIB. If the SEC had done their job and acted on the information they had, thousands of victims would have been spared the devastation their incompetence and lack of action caused.


The deadline for submitting a claim ran out on February 16th 2011 and it is too late for those that chose not to join with Stanford International Victims in registering a claim.


Kachroo Legal Services, P.C.


Dear Claimant:


This notice confirms that your administrative claim under the FTCA has been filed with the U.S. Securities and Exchange Commission.


Sincerely,

The KLS Team


-------------------------------------------------------------------------------------------------------------------------------------------------

Estimado Reclamante:


Esta notificación confirma que su reclamo administrativo bajo la FTCA ha sido radicado con la Comisión de Mercado de Valores (SEC por sus siglas en Ingles).


Atentamente,


El Equipo KLS

Two Year Anniversary Brings Flood of Stanford Lawsuits

Source: Scott Cohn (CNBC)

Two years to the day after the U.S. Securities and Exchange Commission accused billionaire banker R. Allen Stanford of running a $7 billion Ponzi scheme, investors and a court-appointed receiver have unleashed a flood of lawsuits — including one targeting a top government official in Antigua where the alleged scam was based.

The following statement is condemned by Stanford International Victims Group

Another suit seeks the return of more than $7 million in Stanford contributions to St. Jude Children's Research Hospital and its charitable arms.

Stanford International Victims are Demanding the Committee Retract the Law Suit and issue a public apology

A spokeswoman said St. Jude had accepted the contributions "in good faith."

Other claims target Stanford board members, organizers of major sporting events funded by Stanford, and The Golf Channel, which is owned by NBCUniversal parent Comcast [CMCSA 25.13 0.97 (+4.01%) ]. A spokesman for the Golf Channel declined to comment since officials had not yet seen the complaint.

The suits come as investors scramble to meet a two-year statutory deadline for claims, in a process that has yielded little for Stanford's 28,000 investors. Stanford himself has denied wrongdoing.

Meanwhile, 36 former Stanford employees, sued by the receiver in 2009 seeking the return of their bonuses and other compensation, today countersued the receiver, Dallas attorney Ralph Janvey. The suit accuses Janvey of so badly mismanaging the receivership that it has cost investors and the employees hundreds of millions of dollars, and destroyed the employees' careers.

"This damage is massive and will continue for years into the future," the countersuit says.

The countersuit says the employees plan to contribute any proceeds from the claim to a fund for victims—including themselves. It says the employees understood Stanford's business to be legitimate, and had invested millions themselves. The suit also repeats an earlier claim by Stanford that a prominent brokerage firm had offered $500 million to purchase the company's operations following the SEC suit, though the suit cites no specific evidence of the offer. It claims Janvey ignored the advice of an industry consultant to accept the alleged offer, denying hundreds of millions of dollars in proceeds to the victims.

An attorney for Janvey, Kevin Sadler of the law firm Baker Botts, denied there was any opportunity to sell the Stanford operations.

"The suggestion that a brokerage firm which operated at the heart of a Ponzi scheme could be sold to anyone in the weeks or months after the SEC filed its securities fraud lawsuit, defies logic, common sense, and the facts," Sadler said in a statement e-mailed to CNBC.

"The defensive claims by the former Stanford financial advisors, all or whom received substantial payments from Stanford, are baseless," the statement says.

Janvey this week reported he has recovered just $188 million in cash for investors out of more than $7 billion that is missing. But in a court filing on his behalf, Janvey's attorneys blamed the small recovery on a "difficult, protracted and expensive" process, as well as the complexity of the alleged Stanford fraud. Janvey has filed some $600 million more in claims including those filed today. Another $300 million or so is believed to be in foreign accounts, according to the filing.

Among the lawsuits filed Wednesday is a $1 million claim by the Official Stanford Investors Committee against Antiguan Minister of National Security Errol Cort, who until 2009 was the Caribbean nation's Finance Minister and oversaw Stanford's offshore bank at the heart of the alleged fraud.

"Antigua's 'regulation' of the Stanford entities was a sham," the lawsuit says.

As Finance Minister, Cort was responsible for Antigua's Financial Services Regulatory Commission. The former head of that agency, Leroy King, was indicted in 2009 for allegedly accepting bribes from Stanford. King is fighting extradition to the U.S.

A spokesperson for Cort told CNBC the Minister had not yet seen the investors' lawsuit and would have no immediate comment.

Other suits name tennis' ATP Tour and the International Players Championship, neither of which could be reached for comment. Previous suits have targeted golf's PGA Tour and the NBA's Miami heat, neither of which has responded in court.

Another case filed today seeks $2 million from the Center for Strategic and International Studies, a Washington think tank that has previously issued reports on Stanford. The center had no immediate comment.

Meanwhile, some investors are directing their ire at the Securities and Exchange Commission, following an internal report last year that found the agency was aware of issues at Stanford as early as 1997. Many investors have begun the process of suing the agency for negligence by filing notices with the SEC's General Counsel. An SEC spokesman would not say how many notices the agency has received, and declined to comment on the allegations.

Secrets of the Knight

English Cricket and the comments made by players

Sir Allen Stanford scandal: what the key players said

Some of cricket's most illustrious names, both past and present, were implicated in the Sir Aleln Stanford scandal. Telegraph Sport recalls who said what about one of cricket's darkest episodes.

03 Feb 2011

Comments:
"In three years West Indies are going to be the best in the world, mark my words."
Sir Allen Stanford, outlining his vision for Caribbean Twenty20 cricket (Sep 2007)

"Sir Allen is doing a huge amount for cricket in the West Indies and we are keen to help things develop. We are extremely interested in his ideas." Giles Clarke, ECB chairman, on playing a $20million, winner-takes-all Twenty20, against West Indies (April 2008).

"Money like that has never been talked about in cricket. People can abuse us but they are not going to pay my child's school fees in 15 years. To be offered something like that, it's like winning the lottery."
Kevin Pietersen, the England batsman, on the financial implications of the proposed tie-in with Stanford (April 2008).

"I go back to Kerry Packer when I first started, he shook the whole place up. I think what Stanford is doing is shaking it up again."
Sir Ian Botham (June 2008)

"I do not think Mr Stanford is telling the people what he's really about. He is telling people that he wants to revive West Indian cricket but how is a week of Twenty20 cricket going to do that? I am not going to be involved in a farce."
Michael Holding, previously a Stanford supporter (Aug 2008)

"When the pictures came up on the big screen there were a lot of gobsmacked people in our side. Matt Prior was in a state of shock, especially as his wife is pregnant."
Stuart Broad, on seeing pictures of Stanford flirting with several of the England players' partners during a game with Middlesex (Oct 2008)

"He understood that the players were not particularly pleased with the incident. He called both Kevin Pietersen and Matt Prior personally and they have accepted his apology."
A Stanford spokesman, on the flirting incident

"I asked the ECB to do a lot more checking on Stanford. We made it very clear we that we should not enter into this agreement without proper checks but he [Clarke] had already done the deal. The board should resign collectively"
Rod Bransgrove, Hampshire chairman when doubts over the ECB's five-year deal with Stanford began to surface (Oct 2008)

"This is a rehash of old gossip and unsubstantiated allegations."
A Stanford spokesman after confirmation that the businessman's empire was being investigated by US authorities in Feb 2009.

"Stanford and [his] close circle perpetrated a massive fraud based on false promises and fabricated data to prey on investors."
Linda Chatman Thomsen, director of the Securities and Exchange Commission, announcing Stanford had been charged with fraud (Feb 2009).

"I don't know what people would have said at the time had we not done the deal and had we not allowed our players the chance to play for US$20 million. There has been a lot of sagacious hindsight."
Giles Clarke, reacting to calls for him to quit in the wake of Stanford's arrest (Feb 2009).

"I was an ambassador for Stanford - a player face - but that contract has gone. I was very uncomfortable with the whole Stanford thing."
Kevin Pietersen, after Stanford's charge (Feb 2009).

“I know that some are pretending they never trusted him, but I couldn’t do that. I did and I still do. I hope that he is cleared."
Sir Garfield Sobers, ex-West Indies captain and one of Stanford's 12 cricket 'ambassadors' (Dec 2009)

"Its a good thing I take that million US$ from u in the stanford so I can buy Nandos lol cappo!"
Chris Gayle, West Indies batsman, tweets to Kevin Pietersen, after the latter teases him over not being able to afford a slap-up dinner due to not being bought at the IPL auction (Jan 2011)

OPEN LETTER TO STANFORD INVESTORS REGARDING FTCA CLAIMS AGAINST THE UNITED STATES SECURITIES AND EXCHANGE COMISSION

Dear Stanford Investors,

There have been some very critical accusations from some of the Stanford investor groups; some of their attorneys; and even the Stanford investors committee; relating to the Stanford FTCA claims, some of which are clearly intended to discredit the investors behind this effort to inform and encourage you to preserve your rights to claim against the SEC, by filing an administrative claim.

As one of the instigators of this course of action, I think it is time that some of the false and misleading claims are put to rest, and suggest that searching questions be raised of the motivation of some of the individuals who are behind these accusations.

On the 15th November 2010, little more than two months ago, I wrote to the Stanford Investors Committee (SIC) and enquired if they had any intention of taking any action against the SEC, given the damning OIG report and the pending expiration of the statute of limitations. I still await a reply to that letter; however, following a later discussion with one of the attorney members of that committee, it was apparent the committee had no intention of commencing any such action to protect us.

Shortly afterwards, I got together with a small group of like-minded investors to search for a new attorney to represent us in a claim against the SEC. First there were attempts to have us gagged, which we had to overcome. Since then we have worked night and day, to bring together a workable solution that may benefit all the Stanford investors.

The number of attorneys with relevant experience of successful claims against the SEC are few. Lengthy discussions followed with Dr Gaytri Kachroo of Kachroo Legal Services (KLS), following the FTCA claims KLS had submitted for 500 Madoff investors, and we were all impressed; not just by her excellent academic achievements, but by the way she had reached the higher echelons of her chosen profession, yet managed to maintain a caring attitude; was willing to go the distance for us, and most importantly, had already represented investors in two actions against the SEC and/or the US government to successful settlement, and had very plausible arguments that we may succeed with an FTCA claim against the SEC.

Around the same time Angela Kogutt aka Angela Shaw, of the Stanford Victims Coalition (SVC) also approached Dr Kachroo, having seen the press releases relating to the Madoff victims claims. The support of the SVC was initially proffered, and Dr Kachroo was invited to address the SIC, with a view to filing protective FTCA claims for each of the Stanford investors. At that meeting, SIC attorneys all indicated they had no intention of themselves pursuing an action against the SEC because they were all involved in litigating other actions for Stanford investors. They considered Dr. Kachroo to be optimally positioned to take on this action. This created some hope that all Stanford investors could commonly join in the SEC claims process through one channel and action. Covisal, in Latin America, was also invited around this time to participate in the process.

I have no wish to dwell over all the water that has passed under the bridge since then, but our initial hopes that this action may unite all the various investor associations in a common cause were clearly misplaced.

Instead, we have been subjected to a barrage of defamatory internet attacks, mostly anonymous; including accusations of impropriety, amongst many others, all intended to discredit us. Investors who have exercised their right to join us have been threatened, and apparently some of us are now to face legal action.

I could have understood if these attempts to discredit us, and threats of legal recourse, had been at the instigation of the institution we hold responsible for our losses, but I am dismayed they are almost entirely from individuals who purport to be working in the best interests of the Stanford investors. How can they claim to be doing so by trying to silence us? What is the motivation behind these attacks, and why are they reluctant for Stanford investors to preserve their rights to any recovery?

Since we embarked on this course of action, all we have ever wished, is to make as many Stanford investors as possible aware of this possibility for recovery, and enable your to make your own educated decisions how best you may preserve your rights of recovery against the SEC, before the statute of limitations expires.

As far as the Stanford Investors Committee is concerned, I really would like to know why the preservation of all Stanford investors' interests was not encouraged by them long before, and why exactly are SIC members only now purporting to do so now, at the last moment, and then only after our attorney has agreed to take the case? If that committee really is acting in our best interests, why do they refuse to support the one attorney who truly believes in our cause? Furthermore, if we had not instigated this action, would they have simply allowed the statute of limitations to slip quietly by, and all the investor’s rights along with it?

To those investors who have decided to ‘self-file’ their own claims, I wish you well, and hope you have done your research. If you have not, and have allowed yourselves to be railroaded into an action you do not fully understand, and it all goes wrong, who will you blame; yourself, or those who persuaded you it was easy to do it yourself?

To those investors who understand the risks, yet have chosen to file with a different attorney, I wish you well too, yet I do not understand why any investor would willingly choose an attorney who is not prepared to litigate their claim.

To the investors who have joined us, and have realized the common sense of registering with KLS, I wish you the best of all. It is your willingness to participate that has created the critical mass we needed to ensure this action can now go all the way. Thank you all.

To those of you who have yet to decide what is best for yourselves, please make your decision sooner rather than later. You have less than three weeks before the statute of limitations expires, after which you will be barred forever from claiming your losses against the SEC, and if you decide to join us you are all very welcome. Here is Kachroo Legal Services email one last time: info@kachroolegal.com and if you wish to read more of the arguments and discussions, please visit http://stanfordsforgottenvictims.blogspot.com or register for our private forum, which is free of charge and open to all bona-fide Stanford investors: http://svg.creatuforo.com/profile.php?mode=register


Lest anyone else allege I am hiding behind any facades, here is my email address, and I will strive to get back to everyone who may be interested enough to drop me a line, time permitting:

stanfordvictim.richard@gmail.com

Richard Watson
27th January 2011

Angry Investors Threaten Suit

Plaintiffs Claim Regulators Ignored Warnings of Fraud

By BILL LODGE
Advocate Staff Writer

Some of the investors alleged to have been defrauded by Texas
promoter Robert Allen Stanford say they will use a
Massachusetts lawyer to sue the federal government for
alleged failure to take timely regulatory action against him.

I believe we’re going to join this lawsuit,” said Baton Rouge
real estate investor Jason S. Graham, 39.

Graham is one of more than 1,000 residents of the Baton
Rouge, Lafayette and Covington areas who lost an estimated
combined total of more than $1 billion to Stanford’s
operations. Those estimates are by state Rep. Bodi White, RCentral,
and Baton Rouge attorney Phillip W. Preis.

We’ve waited for the last two years for our Congress people
and senators to help us,” said Graham. “It’s an absolute joke.
”
Graham already is a plaintiff in a civil lawsuit against the
people who marketed Stanford’s worthless certificates of
deposit and other investment vehicles in Louisiana.

That lawsuit and similar actions across the country, however,
were suspended more than a year ago on orders from a Dallas
federal judge.

U.S. District Judge David Godbey ruled that those lawsuits
would interfere with a court-appointed receiver’s efforts to
track down the remnants of Stanford’s assets.

But attorney Gaytri Kachroo, of Cambridge, Mass., filed a
class-action suit against the federal government in November
for alleged failure by the Securities and Exchange Commission
to protect people’s savings from New Yorker Bernard Madoff’s
admitted Ponzi scheme.

A Ponzi is an illegal investment scheme that involves few, if
any, actual investments. Early investors are paid dividends
described by Ponzi operators as profits. The money actually
comes from later investors.

The scheme collapses when promoters can no longer coax
money from newly targeted victims.

Madoff is serving a 150-year term in federal prison for bilking
billions of dollars from pension funds, mutual funds and indidual investors.

The scheme collapses when promoters can no longer coax money from newly targeted victims.

Madoff is serving 150-year term in federal prison for bilking billions of dollars from pension funds, mutual funds and individual investors.

Kachroo said she now is filing administrative law claims with
the SEC in the Stanford case in order to preserve the rights of
people in Louisiana and other states to file a class-action suit
against the commission after the Feb. 16 filing deadline. That
date will mark the second anniversary of the SEC’s action to
shut down Stanford’s worldwide operations.

In such cases, plaintiffs cannot sue the federal government
until after a federal agency has denied investors’ claims,
Kachroo said.

Kachroo said last week that she has filed with the SEC claims
by 30 Stanford investors. Another 270 claims were being
processed by her staff, she said.

SEC lawyers in Dallas and federal prosecutors in Houston
allege in court filings that Stanford operated a Ponzi scheme
that harvested at least $7.2 billion from more than 25,000
people from Baton Rouge to Bogota, from Venezuela to
Europe.

Stanford, 60, remains in federal custody in Houston, where he
faces federal fraud charges.

James M. Davis, a Baldwyn, Miss., resident who served as
Stanford’s chief financial officer, has pleaded guilty to felony
charges and admitted that Stanford’s operations were a huge
Ponzi from the beginning.

Whistleblowers ignored?

For nearly nine years before Madoff admitted that his
investment empire was a giant Ponzi, financial analyst and
certified fraud examiner Harry Markopolos had warned the
SEC that the man was a criminal.

Kachroo represented Markopolos when he testified Feb. 4,
2009, before the U.S. House of Representatives’ Committee on
Financial Services.

“Every tool, every resource, and every person (in the SEC) has
to be brought to bear in the fight against white-collar crime,”
Markopolos testified. “Government has coddled, accepted and
ignored white-collar crime for too long.
”
Markopolos added: “It is time the nation woke up and
recognized that it’s not the armed robbers or drug dealers who
cause us the most economic harm.

“It’s the white-collar criminals living in the most expensive
homes and who have the most impressive resumes who harm
us the most,” Markopolos told members of Congress. “They
steal our pensions, bankrupt our companies and destroy
thousands of jobs, ruining countless lives.
”
Last year, SEC Inspector General David Kotz reported that
commission officials repeatedly failed to pursue whistleblower
allegations between 1997 and 2005 that Stanford was
defrauding his investors. During that same time, Kotz
reported, examiners in the SEC’s Fort Worth office called for
investigation of Stanford at least three times.

In Baton Rouge, Preis continues to pursue a civil lawsuit on
behalf of Stanford investors against the state Office of
Financial Institutions. That suit alleges that OFI officials failed
investors by ignoring warning signs that Stanford’s operations
were fraudulent.

Preis said last week he believes that suit has a chance of
success, but he asserted that Kachroo has picked too big a rival
in the Stanford and Madoff litigation.

“We don’t think the idea of pursuing a suit against the SEC has
much merit to it,” Preis said. “The chances of ever collecting
from the United States government are slim to none.
”
Katchroo said she believes ordinary people can fight City Hall
and even collect damages from the federal government in the
Stanford and Madoff tragedies.

We believe we have a fairly good chance in both cases,”
Kachroo said.

The SEC won’t talk about Kachroo’s efforts in either case.
“
"Decline comment on both,"” e-mailed SEC spokesman John J.Nester.

Stanford was scheduled for trial on his criminal charges this
month. But a federal judge in Houston postponed that trial
indefinitely after being informed that Stanford has become
addicted to painkillers while in federal custody.

FREQUENTLY ASKED QUESTIONS FROM STANFORD LATIN AMERICAN INVESTORS ABOUT FTCA CLAIMS

There still appears to be some confusion in Latin and South America about the FTCA claims process, due to misleading statements from some of the ‘leaders’ who are not giving advice that is in the best interests of the investors. They continue to advise investors to fill-out their own FTCA claim forms, without acknowledging the risks of such claims being incomplete; being submitted too late; or being otherwise ineligible. Please refer to some of our other posts for more detail of the risks involved in ‘self-filing.’ Although the form SF-95 appears simple enough, it has been tested in court cases many times. There is a massive amount of case-law, and other legal obstacles, investors must understand in order to complete the form correctly. Please understand that few of the English speaking investors are filing their own claims as they realize just how easy it is to get it wrong.

I have seen the advice that has been given by Covisal for investors to file their own claims. Some of this advice has been given by OFFICERS OF THE SEC, who we will be suing. Does anyone really imagine they are impartial, and it is good advice to follow?

We understand one of the ‘Leaders’ has also advised their followers that there is no urgency to submit claims, as this is will be a class-action that all investors can join-in later. Anyone spouting such blatant misinformation should not be trusted further. Should there be litigation, which will most likely become a class-action, ONLY those investors who have registered valid claims before the statute of limitations expires can be included. This is an action against the US Government under the FTCA, where the rules for eligibility are very different to other class-actions. NOBODY can join-in later. Also please be aware your claim MUST be received by the SEC, by registered mail and receipted delivery, BEFORE the Statute of Limitations expires, which is the 16th February 2011, OR IT WILL BE REJECTED.

There was a statement from one Latin American investor, who recently returned from the USA and stated he would file his own claim, as in his opinion, if a class action lawsuit is brought against the SEC in the future. “No attorney will reject a potential client with his/her SF-95 filed correctly.” Please be aware there is the distinct possibility that individual investors who ‘self-file’ could be excluded from any future class action, even if they manage to successfully file their own claims, simply because their explanation why the SEC is responsible differs significantly from the explanation given by the rest of the class. In that case, they may have to argue their claim in court, on their own, and at their own expense.

Also, even if this investor properly constructs his own claim, and he manages to get it filed timely and correctly with the SEC just to avoid paying any initial attorney fees, in six months time, when it is declined, he will still to hire an attorney to litigate his claim, and when an award is eventually made by the court, the judge may well award up to 25% to the ‘lead attorney’ as contingency fees. He may not have a contract for a 15% contingency fee, such as that negotiated with Kachroo Legal Services, and there is no guarantee that investors will be offered the same terms in six months time. Please do not be under any false illusions. The SEC are not simply going to agree all the claims and pay-out $7bn. THERE WILL HAVE TO BE A LAW SUIT, and the least expensive way for any investor to be included is with a contract from an attorney who will litigate the case as a class-action. So far we only know one such attorney, and we have hired her.

For investors in Latin and South America, who can see the sense that this needs to be handled by an experienced and indemnified attorney, to protect themselves, please also ensure that the attorney you consult has graduated from a US School of Law. The US legal system follows the law of precedent, as does that in Britain, NOT the Napoleonic Code you may be more familiar with in Latin and South America. Please also make sure your attorney is willing to litigate your claim, should it be rejected or otherwise ineligible, and has previous experience of submitting FTCA claims.
It is unlikely your neighborhood attorney in Caracas, Lima, Bogota, or Mexico will be conversant with FTCA claims.

Finally, we understand the ‘Leader’ of Covisal continues to claim our attorney only has only been practicing for 6 years, when she actually has 22 years of experience , some of it highly relevant; has never lost a case; and is the most highly rated for her qualifications and experience. Anyone wishing to compare the rating of our attorney with any of the other Stanford attorneys should refer to the following link and draw their own conclusions:

http://www.avvo.com/attorneys/02142-ma-gaytri-kachroo-1356107.html and her CV can be found here: http://www.kachroolegal.com/docs/dr_kachroo_cv.pdf

Any Stanford investors, who have not yet decided whether to join this action, should contact their own attorney at their earliest opportunity, or the attorney submitting the FTCA claims on behalf the Stanford International Victims Group: Kachroo Legal Services of Cambridge, Mass. who already have experience of submitting over 500 claims on behalf of the Madoff investors.

Email: info@kachroolegal.com

Should any Stanford investors wish for more detail of the campaign and the various arguments, please register for our private investor’s forum, which is free of charge and available only to bona-fide investors in the failed Stanford Financial Group: http://svg.creatuforo.com/profile.php?mode=register


Written by David Brent

For Stanford International Victims Group

Stanford companies say Antigua government owes them millions

The Stanford Group of Companies has sent a letter of demand to the Commissioner of Inland Revenue alleging that Stanford Development Company (SDC) is owed over $11 million for Antigua & Barbuda Sales Tax (ABST) returns for the period June to November 2008.

The letter was prepared and sent to Inland Revenue by SDC‘s legal representative Hugh Marshall and Company mid-February – just days after the Antigua Public Utilities Authority (APUA) pulled the plug on a number of Stanford companies resulting in the halting of operations. Some of the affected businesses are Sticky Wicket Restaurant, Antigua Athletic Club and Stanford Warehouse.

A Stanford affiliate who requested anonymity said the company is asking that the ABST returns and loans to government, prior to 2004, be repaid or at least credited towards the $7 million reportedly owed to APUA for utilities.

The source accused government of contributing to the companies’ disconnection woes, adding that government is stalling negotiations regarding restoration of utilities needed to resume operations.

The source said that while there has been settlement talks between government and Andrea Stoelker, who is one of the directors of the Stanford Group, those discussions ceased because Stoelker does not have a work permit and government “refused to grant her one, which has caused her to have to leave the island at least three times since Stanford was indicted for fraud.”

The affiliate said the Stanford Group is owed just over $2.1 million as of June 27, 2008, a further $5.7 million as of August 1, 2008 and a little over $4.4 million as of November 4, 2008.

Meantime, a government source said APUA is a statutory corporation and any utility bills incurred should be paid.

“APUA is a statutory corporation and whatever money SDC claims to be owed in ABST returns or for another reason, has nothing to do with the sums they owe for the utilities they failed to pay for,” the individual said. “They should have been paying their monthly bills. It has nothing to do with whether government owes the company ABST.

“If those are the figures they’ve indicated, then they must be corroborated by Inland Revenue records.”

The group reportedly began talks with government in mid-February, this year, to discuss a number of issues, including repayment of loans to government prior to 2004, monies owed to APUA, continued operations of the Athletic Club, Sticky Wicket, the Pavilion Restaurant, FBO Hangar, Sun Printing and Publishing, among other companies, and acquisition of Stanford lands.

Other issues government wants to address with the Stanford companies reportedly relate to severance payment to the hundreds of employees sent home after US authorities accused Sir R Allen Stanford of running a massive Ponzi Scheme, and repayment of loans to government pre-2004.

Also on the table for discussion is APUA’s interest in the osmosis plant owned by Stanford Group.

This newspaper was reliably informed that APUA was seeking to purchase water from the group but had to turn down the company’s offer because “the price was way above the cost currently being paid to another private company.”

On February 4, operations ceased at Sticky Wicket, the Pavilion, Stanford Warehouse and the Athletic Club when APUA halted utility services to these businesses. The employees were sent home “for three months.”