The final decision

Stanford Group sold the CDs while claiming that they were backed, at least in part, by SLUSA-covered securities.

 Therefore, the government's lawyers say, the bogus investments were in fact sold "in connection with" covered securities. And for SLUSA to work, it must be interpreted broadly, and the SEC's views (as the SLUSA watchdog) must be given deference.

 "Congress intended the phrase 'in connection with' to sweep widely enough to ensure achievement of 'a high standard of business ethics in the securities industry,'" while reining in excessive class actions, the government argues.

 But Preis says the SEC is backing what Goldstein calls a "newfound interpretation of the securities laws" to broaden its enforcement power "at the expense of backing the Stanford victims." Since the Stanford products that local investors bought were not sold on the New York Stock Exchange, state law should apply, he says.

 Regardless, it's an intriguing turn in the SEC's complicated role in the Stanford fiasco. Many victims blame the regulators for not catching on to Allen Stanford's scheme early. But the SEC backed investors' controversial bid for relief from the Securities Investor Protection Corp., even though the Stanford International Bank in Antigua, which issued the worthless CDs, was never a SIPC member.

 Read More: http://sivg.org.ag/topic198.html 

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