Antigua St. John’s - Stanford victims in Antigua are calling the historic victory over the United States Securities Exchange Commission (SEC) a landmark achievement and “the best news the victims have had in three-and-a-half years.”
On Friday, a US Court ruled that the SEC must defend a negligence claim contending that the Commission had failed to act appropriately after concluding at least four times before 2008 that R. Allen Stanford was indeed operating a Ponzi scheme.
“We have made legal history with this latest ruling and I encourage all Stanford victims to go to http://stanfordsforgottenvictims.blogspot.com/ to read how they can join this lawsuit and for the first time have a chance of recovering their stolen money,” said spokesperson for the Stanford International Victims Group (SIVG) Kate Freeman.
She added that the achievement of attorney Gaytrie Kachroo is the first for any lawyer in finding a legal solution to the Discretionary Rule that has long protected the SEC from legal sanction when it failed to act accordingly.
“There are thousands of Stanford Victims that need to be made aware of what we have done here and also be given the chance of joining Kachroo Legal Services on this journey,” Freeman said.
The victims now have a clear passage to continue forward with the claim against SEC examiners, according to the ruling.
The lawsuit being carried by Kachroo claims that the SEC had a “nondiscretionary duty” to report Stanford to the Securities Investor Protection Corp. (SIPC) in the USA. The landmark judgment was filed on September 7.
“Gaytri Kachroo was originally contacted by me and another victim and asked to work on the behalf of the Stanford International Victims group to sue the American Government and the SEC. All other lawyers said this could not be done due to the “Discretionary Rule” that protects the US government and its departments,” Freeman said.
The attorney is reported as saying on Friday in a www.bloomberg.com report that the judge’s decision was the first to overcome the SEC’s “sovereign immunity.”
“The ruling handed down… is a bold statement and a warning to the government: if you fail to carry out your statutory obligations to protect the public against wrongdoing with massive repercussions to the investing public, you will be held liable,” Kachroo said in a statement.
According to the judgment, “…The Securities and Exchange Commission was obligated to report Stanford’s company to the Securities Investor Protection Corp. This obligation to report was not discretionary because the controlling statute mandates that the report be made.”
The SEC may use the next stage of the litigation to raise the argument that it had not concluded before 2009 that Stanford was running a Ponzi scheme, despite the plaintiff’s claims.
It is also being reported that the SEC shied away from investigating the case because of the clear complexities involved, as they reportedly preferred to investigate more slam-dunk cases due to work evaluation purposes.
The case is Zelaya v. United States, 11-cv-62644, U.S. District Court, Southern District of Florida (Miami).
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