We are awaiting a statement from Gaytri regarding this, she says the Judge totally missed the point of our lawsuits and she is appealing this. We will post Gaytri's response as soon as we receive it.
(Reuters) - A federal judge in Florida has thrown out a lawsuit accusing the U.S. Securities and Exchange Commission of negligence for failing to report that the now-imprisoned swindler Allen Stanford was running a $7.2 billion Ponzi scheme.
U.S. District Judge Robert Scola in Miami said the market regulator was shielded under an exception to the Federal Tort Claims Act that bars claims arising from misrepresentation or deceit.
The plaintiffs, Carlos Zelaya and George Glantz, said they lost a combined $1.65 million with Stanford, and sought class-action status on behalf of investors who were victims of his fraud. They plan to appeal Monday's decision, their lawyer Gaytri Kachroo said. SEC spokesman Kevin Callahan declined to comment.
Stanford, 63, is serving a 110-year prison sentence after he was convicted on criminal charges in March 2012 for a fraud that the government said was centered in certificates of deposit issued by his Antigua-based Stanford International Bank.
Zelaya and Glantz claimed that the SEC considered Stanford's business a fraud after each of four examinations between 1997 and 2004, but failed to advise the Securities Investor Protection Corp, which compensates victims of failed brokerages.
The SEC filed civil charges against Stanford in February 2009, two months after the multibillion-dollar Ponzi scheme of New York-based swindler Bernard Madoff was uncovered. In a typical Ponzi scheme, investors are promised high or consistent returns relative to the amount of risk taken, and older investors are paid with money from newer investors.
Last September, Scola let the lawsuit against the SEC go forward, saying the plaintiffs could argue that the regulator had breached a duty to report Stanford's misconduct.
But on Monday, he said the FTCA exception barring claims of misrepresentation deprived him of jurisdiction.
"The plaintiffs claim that they were induced into entering disadvantageous business transactions because of the SEC's misrepresentation," he wrote. "The plaintiffs' cause of action is a classic claim for misrepresentation."
Their lawyer Kachroo said: "We believe that the judge did not draw the appropriate distinction between a claim based on a misrepresentation and our claim based on a failure to warn in line with the SEC's mandatory duty to notify SIPC."
In 2010, the SEC's inspector general criticized the regulator, finding that it knew as early as 1997 that Stanford was likely running a Ponzi scheme.
Earlier this year, federal appeals courts in New York and California dismissed lawsuits against the SEC by victims of Madoff's fraud.
The case is Zelaya et al. v. U.S., U.S. District Court, Southern District of Florida, No. 11-62644.
Read More: http://sivg.org.ag/topic177.html
For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group - SIVG official forum http://sivg.org.ag/
Showing posts with label Bernard Madoff. Show all posts
Showing posts with label Bernard Madoff. Show all posts
Friday, 16 August 2013
Saturday, 20 July 2013
Investors Sue Insurance Company That Vouched for Stanford Ponzi Scam
By John Pacenti All Articles
Daily Business Review
The letters circulated by Stanford International Bank among would-be investors claimed deposits were insured by Lloyds of London and that the bank's employees were "first class business people."
The letters proclaimed the bank had undergone "stringent risk management review by an outside audit firm."
Stanford International Bank is now known as one of the world's largest Ponzi schemes, a $7 billion scam that is second only to the con pulled off by the former New York investment adviser and financier Bernard Madoff. The Stanford bank, which was based in Antigua and maintained a sizable footprint in Miami, went under in 2009.
So while the bank's founder and one-time billionaire, R. Allen Stanford, is serving a 110-year prison sentence for fraud, investors are looking for deep pockets to make them whole.
They hope they found it in Willis Group Holdings, the U.K.-based insurance company that provided Stanford with written endorsements. The investors are also suing Willis Group's American subsidiary based in Colorado.
Getting the litigation to stick in one jurisdiction, though, hasn't been easy. Filed in Miami-Dade Circuit Court in February, the plaintiffs' suit was transferred to U.S. District Court in Miami on June 3.
U.S. District Judge Jose E. Martinez stayed the case on June 14 after the Willis Group argued the U.S. Supreme Court is looking at the liability of insurance letters to investors in a related case against Willis Group.
Other lawsuits against Willis Group by similarly situated plaintiffs have ended up in multidistrict litigation in Dallas. One has also been stayed by a Miami federal judge.
A telephone call placed to attorney Edward Soto, a partner at Weil Gotshal & Manges in Miami who represents Willis Group, was not returned by deadline.
But in his motion to Martinez for a stay, Soto said the defendant expects the case and four others filed against Willis Group to be transferred to the U.S. Bankruptcy Court in Texas that oversees the estate of Stanford International Bank.
The plaintiffs attorney, Ervin Gonzalez, said businesses that vouch for criminal enterprises like Stanford need to be held accountable.
"If someone is going to give an endorsement ... they'd better be careful because people rely on those endorsements," said Gonzalez, a partner at Colson Hicks Eidson in Coral Gables, Fla. "They have an obligation and a duty to be accurate."
Also representing the plaintiffs is attorney Luis Delgado, a partner at Miami's Homer & Bonner.
"From in or around August 2004 through 2008, Willis provided 'safety and soundness' letters to Stanford Financial's agents on Willis letterhead and signed by a Willis executive," the lawsuit claims.
The letters misled clients into believing their deposits were safe and insured, the lawsuit states.
The 29 plaintiffs are from Uruguay, Bolivia, Colombia and Venezuela and had a combined loss of $30 million when SIB collapsed. The lawsuit states they received identical Willis Group letters with the only difference being the date and address.
Daily Business Review
The letters circulated by Stanford International Bank among would-be investors claimed deposits were insured by Lloyds of London and that the bank's employees were "first class business people."
The letters proclaimed the bank had undergone "stringent risk management review by an outside audit firm."
Stanford International Bank is now known as one of the world's largest Ponzi schemes, a $7 billion scam that is second only to the con pulled off by the former New York investment adviser and financier Bernard Madoff. The Stanford bank, which was based in Antigua and maintained a sizable footprint in Miami, went under in 2009.
So while the bank's founder and one-time billionaire, R. Allen Stanford, is serving a 110-year prison sentence for fraud, investors are looking for deep pockets to make them whole.
They hope they found it in Willis Group Holdings, the U.K.-based insurance company that provided Stanford with written endorsements. The investors are also suing Willis Group's American subsidiary based in Colorado.
Getting the litigation to stick in one jurisdiction, though, hasn't been easy. Filed in Miami-Dade Circuit Court in February, the plaintiffs' suit was transferred to U.S. District Court in Miami on June 3.
U.S. District Judge Jose E. Martinez stayed the case on June 14 after the Willis Group argued the U.S. Supreme Court is looking at the liability of insurance letters to investors in a related case against Willis Group.
Other lawsuits against Willis Group by similarly situated plaintiffs have ended up in multidistrict litigation in Dallas. One has also been stayed by a Miami federal judge.
A telephone call placed to attorney Edward Soto, a partner at Weil Gotshal & Manges in Miami who represents Willis Group, was not returned by deadline.
But in his motion to Martinez for a stay, Soto said the defendant expects the case and four others filed against Willis Group to be transferred to the U.S. Bankruptcy Court in Texas that oversees the estate of Stanford International Bank.
The plaintiffs attorney, Ervin Gonzalez, said businesses that vouch for criminal enterprises like Stanford need to be held accountable.
"If someone is going to give an endorsement ... they'd better be careful because people rely on those endorsements," said Gonzalez, a partner at Colson Hicks Eidson in Coral Gables, Fla. "They have an obligation and a duty to be accurate."
Also representing the plaintiffs is attorney Luis Delgado, a partner at Miami's Homer & Bonner.
"From in or around August 2004 through 2008, Willis provided 'safety and soundness' letters to Stanford Financial's agents on Willis letterhead and signed by a Willis executive," the lawsuit claims.
The letters misled clients into believing their deposits were safe and insured, the lawsuit states.
The 29 plaintiffs are from Uruguay, Bolivia, Colombia and Venezuela and had a combined loss of $30 million when SIB collapsed. The lawsuit states they received identical Willis Group letters with the only difference being the date and address.