By JORDAN BLUM
Capitol news bureau
February 09, 2012
U.S. Rep. Bill Cassidy plans to file legislation Thursday to allow investors of R. Allen Stanford to individually opt out of a federal lawsuit for one-time buyouts of up to $500,000.
The Securities and Exchange Commission filed suit in December against the Securities Investment Protection Corp. trying to force it to pay up to $500,000 each in lost money to investors with Stanford.
The Houston businessman is alleged to have run a Ponzi scheme while feeding his own wealthy lifestyle.
SIPC offered to pay investors up to $250,000, about half of what the law mandated by Congress allows, but the SEC previously rejected the offer.
The "Improving Security for Investors and Providing Closure Act," or Improving SIPC Act of 2012, legislation by Cassidy, R-Baton Rouge, and U.S.
Rep. Ted Deutch, D-Fla., would allow SIPC to name a fixed payout amount - potentially $250,000 - and let individual victims decide for themselves whether to remain in the lawsuit.
Investors who lost in the realm of $250,000 or so in net equity could, hypothetically, recover nearly all of what they lost, while someone who lost millions of dollars could choose to remain in the lawsuit and reject the $250,000.
"R. Allen Stanford defrauded thousands of hard working men and women of their entire life savings," Cassidy said in a prepared statement. "Those who lost smaller amounts will be eligible for reimbursement from SIPC while those who decide to continue their court battle will be able to do so. Many victims of the Stanford Ponzi Scheme were working men and women, this legislation will enable them to put this tragedy behind them."
Stanford is proclaiming his innocence in a Houston jail where he is being held on federal charges that he cheated customers for $7.2 billion. About 1,800 were from Louisiana - mostly in Baton Rouge, Lafayette and Covington.
Stanford's trial is currently under way.
Louisiana investors lost an estimated $1 billion, mostly in hundreds of thousands of dollars each in retirement savings.
Some of the affected investors have expressed concerns about meeting their financial obligations during a potentially prolonged federal lawsuit.
Baton Rouge lawyer Phil Preis is representing about 150 of the Louisiana investors, many of whom are ExxonMobil retirees who lost $500,000. Preis said the legislation could represent a huge deal for many of the victims and allow them to avoid an expensive liquidation process.
"If they (SIPC representatives) make a meaningful settlement offer - $250,000 to $300,000 - I think most of them will take advantage of it,"
Preis said of his clients.
While those who take an offer would give up any future claims against SIPC, Preis noted, they would still be able to make claims against other people and entities involved.
Other cosponsors of the legislation include U.S. Reps. Rodney Alexander, Charles Boustany and Jeff Landry, all of whom are Louisiana Republicans.
No comments:
Post a Comment