Stanford's Victims Oppose Fee Increase Sought by Receiver Janvey

Ralph Janvey, court-appointed receiver helping former clients of convicted
Texas financier R. Allen Stanford, is facing opposition to a request for a
pay raise from those clients.

Janvey and his team of professionals have been paid more than $45 million
since they were appointed to oversee Stanford's assets, which were seized by the U.S. Securities and Exchange Commission in February 2009, according to a filing March 30 in federal court in Dallas.

Janvey filed a court request this month for a 10 per cent boost in his
hourly rate and a 10 per cent reduction in the amount the Dallas judge
presiding over Stanford's civil case has ordered held back from the
receivership's billings. The amount held back is $14 million, according to
the filing.

"During this same time, the investor victims have not recovered a single
penny, as there have been no distributions," lawyers for the investors'
committee said in the March 30 filing. "Given the current state of this
receivership, they cannot agree to giving the receiver's professionals what
is widely perceived within the investor community as a 'raise.'"

Stanford, 62, was convicted on March 6 of 13 criminal counts tied to
allegations he defrauded investors through the sale of bogus certificates of deposit at his Antigua-based Stanford International Bank. He faces more than 20 years in prison when he's sentenced on June 14.

Kevin Sadler, Janvey's lawyer, urged U.S. District Judge David Godbey in
Dallas in a March 9 filing to grant the pay increase on the grounds the
receiver's team has been working at below-market rates and hasn't had a
raise in three years. He also claimed that receivers for equally high-profile fraud cases are getting significantly higher pay for similar
work.

The trustee working to compensate victims defrauded by New York financier
Bernard Madoff is charging $765 an hour while his lead lawyers receive $750
to $850 an hour, Sadler said in the Janvey fee-request filing.

In contrast, Janvey said he's receiving just $272 an hour and his lead
lawyers are paid $365 to $444 an hour, after discounts and holdbacks ordered by the judge in the Stanford case are factored in, according to the filing.

The SEC and a court-appointed examiner who represents investors in the case
both oppose raising the hourly pay rate for the receivership team, according to Janvey's filing. The regulators and the examiner agree the holdback should be dialled back to 10 per cent from the current 20 per cent, according to the filing.

As of Oct. 31, Janvey's most recent accounting of the Stanford
receivership's assets, the estate had total cash on hand of $114.5 million

Observations on Report by Morganstern Re Stanford-Related Cases

UPDATE ON STATUS OF MORGENSTERN STANFORD-RELATED CASES; CONTINUING RECOVERY EFFORTS AND CASE DEVELOPMENTS
December 9, 2011

PM says:

Since our last update, there have been several developments that I wanted to call to your attention. This past Monday, we filed our response to the bank defendant's motions to dismiss our complaint against them. Unfortunately, we are not in a position to share the actual response with you because of confidentiality requirements imposed on us. We will continue to aggressively press ahead with this lawsuit against the banks, and have asked the Court to permit the Official Stanford Investors’ Committee (on which we serve) to join the case. The banks have an opportunity to respond, and it is unclear when the Court will consider and decide the motions. We remain confident about our cases, and believe that the claims against the banks could result in significant recoveries. Of course there remain no guarantees of success.

So you filed your response to the banks but we can’t know what that response is, well there’s a familiar story. Surely if you are filing on behalf of your clients (Stanford victims) then the clients have a right to know what you are saying? How much more time (It’s been nearly 3 years since you originally filed these actions against the banks) are you going to spend on these lawsuits before we hear something positive? And, as these are class action lawsuits (filed in Texas I believe) are they all going to be thrown out under SLUSA ? Can you also give me a reason why you feel the need to include the committee to join this case?  I am glad you are not giving any guarantees about this one as I lost all confidence in this action a long time ago.

PM says:

On a second front, the hearing on the Antiguan liquidators’ motion for Chapter 15 recognition is scheduled for December 21 in Dallas. We are actively opposing that application, as we are very concerned about the prospect of the Antiguan court and government exercising control over (i) the hundreds of millions of funds located and frozen by the Department of Justice in overseas bank accounts, and (ii) the Antiguan government gaining access to litigation recoveries that we anticipate in the future and other assets. The Antiguan government itself owes at least tens, if not hundreds of millions of dollars to the Stanford investors, has a history of being corrupt, facilitated and was complicit in this fraud, and has since even failed to extradite Leroy King to the United States to respond to the serious criminal charges pending against him. Although the U.S. legal system is certainly not perfect, we believe it to be far superior to the Antiguan alternative for maximizing investor recoveries.

 If you bothered to take any interest in the mood of Antigua, the government here and what is happening, you would (and do) know that Grant Thornton are acting completely independent from the Antigua Government. You would also know that the courts here come under English law and the appeals procedure again is laid down in English law. To date the courts in the US do not appear to be doing a very good job for the victims, hell they allowed mostly US lawyers to highjack all the positions on the committee. You also know that the Antigua government no longer have possession of any of the Stanford properties and assets and that Grant Thornton are working very hard to bring these under their control for the benefit of all victims. Talking about what the Antigua government owes to the victims, how about we look at what the US politicians owe from “donations” made by Stanford? Isn’t it about time all these politicians paid the money back? It comes to far more than Antigua ever borrowed from Stanford? Again, you talk about the Antigua government being complicit in the fraud. What about America, the CIA, the DEA, the last president, the SEC, the politicians? Compare that to one stupid Antiguan who accepted cash to keep Stanford informed about what was happening, he was a very small fish and he will be brought to justice. Let’s get things into prospective and get your own house in order before you start on Antigua. Also while we are talking about maximising the investors recovery, let’s just think for a moment about the IRS and what they are sitting waiting to take out of the Stanford estate, $260Million I believe at the last count and that can change if and when they take into account the $1.8 Billion “loan” that Stanford gave himself.

PM says:

Our opposition to the Antiguan liquidators is not an endorsement of how this case has proceeded to date. We remain very frustrated by the lack of substantial progress, and are continuing our constant efforts to speed up the cases and maximize recovery for all Stanford investors.

Grant Thornton have only been in situ for less than 6 months and have done a fantastic job, not least at keeping the investors informed about what they are doing and what is happening. They have brought together a TOTALLY INDEPENDENT VICTIM committee, which surprise, surprise is actually made up of VITIMS from around the world. They are asking the victims what their questions are and they are taking the trouble to answer those questions. Compare this to the US committee who for the most part have ignored letters and questions from the victims, have ignored their grievances, for the most part have failed to keep the victims informed, have misled the victims (I refer here to the idea and original composition of the committee we were led to believe would be formed). It’s no wonder they don’t want another (in my opinion) more professional and capable group of Liquidators (GT) coming in and spoiling their nice cosy little set-up.

PM says:

As usual, there continue to be unfounded and untrue rumors being circulated about the Investors Committee. The Committee, which we are part of, is working very hard and represents ALL Stanford investors, regardless of nationality or residence. This allegation about the Committee only serving U.S. investors, is completely untrue and unfair. This was the finding of the Court when it recently denied an attempt by the Kachroo firm to reconstruct the Committee, and denied their motion to intervene in the case.

With regard to the rumours, how are the victims supposed to feel when (see comments above) we have been ignored and to date the majority of efforts seem to have been spent trying to get SIPC for mainly US victims. The committee is made up of mainly Americans, the Political scene is working purely for the American victims, Angela Shaw sends out emails saying she will ONLY REPRESENT THE AMERICANS….der, I wonder why all the international victims doubt your sincerity about representing them? With regard to the finding of the courts regarding Kachroo’s motion to intervene,I believe this was denied on a point of law. Actions speak louder than words and the actions of the committee to date reflect the grave concerns the International Victims have about their neglect by you and the committee. If victim beleive they are not being fairly represented then clearly you have afiled to keep them informed.  It would seem that Kachroo gave you all the kick up the butt that was so badly needed.

We are continuing to move forward with our investigation of potential sources of recoveries, are in discussions (which cannot be made public) with certain significant litigation targets, and are proceeding as quickly as possible with the filed litigations seeking substantial recoveries for investors. We are also representing your interests in all of the major court proceedings.

PM says:

I expect that we will have a further report for you after the next Court hearing on December 21. I know that many of you are frustrated by our lack of personal, individual contact with you. We are trying our best to concentrate virtually all of our efforts on the lawsuits and recovery efforts which we hope will result in significant distributions to you eventually. After the hearings in December and the upcoming holidays, I do plan to schedule a trip to Mexico and other locations, at the beginning of the year, to provide an in-person update to anyone who is interested in attending. In the meantime, please keep watching for updates and monitor the examiner’s website for other Committee news.

Well you are right about us being frustrated by your lack of personal, individual contact.  There are a lot of very disillusioned victims out there. Hope you plan a trip to Antigua, I would LOVE to meet up with you…and while you are at it, please bring Ms. Shaw, I would also love to meet her…as would most of the Antigua population!!

Finally, we are all anxiously awaiting word about the commencement of Allen Stanford’s criminal trial, which remains unscheduled. We will provide you with that information as soon as possible.

Peter D. Morgenstern

Stanford's donations still stain lawmakers' hands

American Lawmakers Hypocrisy

These so-called lawmakers should make sure their hands are clean before coming to the table. It would appear that in this situation they all forget to wash.

They should be putting their own house in order before making demands on SIPC and making sure that they - and every other US politician who benefited from Stanford's generosity (with the money he stole from his victims) - pay back the stolen funds.

Could it be that these US politicians think that if they can get SIPC paid out (mostly to the American victims) the whole situation will die down and the pressure will be off them to do the right thing? Because let's face it not one of these "lawmakers" gives a fig about the International Victims whose stolen money they so readily took and now refuse to return, and not one of these politicians have mentioned that apart from the 4,000 US victims, there are another 20,000+ International victims who they do not fight for.

Then again, the International Victims can't be counted on to vote for them, so why should these political hypocrites bother about spending the International Victims stolen money while they sit on their fat backsides in Washington??


By LOREN STEFFY, HOUSTON CHRONICLE
Published 07:31 p.m., Thursday, December 8, 2011

In the battle over insurance coverage for investors who lost money in the collapse of Stanford Financial's U.S. brokerage, it's difficult to know who's on investors' side.

Recently, 27 lawmakers sent a letter to the Securities Investor Protection Corp., which is funded by the brokerage industry and overseen by the government, demanding that SIPC cover investors for their losses. SIPC granted similar coverage to clients of Bernard Madoff and the recently bankrupted commodities trader MF Global.

The 23 Republicans and four Democrats threatened to convene hearings in Washington next week if SIPC didn't act.

That, apparently, is easier than living up to their own shortcomings.

Seven of the lawmakers who signed the letter received campaign contributions from Stanford. Only two - Rep. Michael McCaul, R-Austin, and Rep. Rep. Charles Boustany, R-La. - returned the money. Five others - Republicans Pete Sessions of Dallas, Lamar Smith of San Antonio and Vern Buchanan and Ileana Ros-Lehtinen of Florida, as well as Democrat Steve Cohen of Tennessee - owe Stanford's estate money, according to the court-appointed receiver in the company's bankruptcy.

The firm's namesake, R. Allen Stanford, liked to spread cash around Washington. The receiver has been trying to recover political donations for almost two years. About $1.8 million remains outstanding, and only about $142,000, has been returned.

Even more disturbing, five committees of the two political parties - the Democratic Senatorial Campaign Committee, the Democratic Congressional Campaign Committee, the National Republican Congressional Committee, the Republican National Committee and the National Republican Senatorial Committee - have refused to return a combined $1.6 million.

In other words, while lawmakers are quick to call on the brokerage industry to insure the losses of Stanford's investors, they are far less willing to demand the same of themselves or their political parties.

Many of the elected officials who received campaign contributions from Stanford - including both Texas senators and Sessions - donated them to charity. That, however, doesn't let the politicians off the hook.

If Stanford was a fraud as the government contends, then the money is stolen. Donating stolen money doesn't eliminate the potential theft. Even if no theft is proved, the receiver is operating under a court order to recover money on behalf of investors, and donating it doesn't absolve lawmakers of the court's order.

Meanwhile, the Securities and Exchange Commission, which is charged with overseeing SIPC, ordered the fund to pay investors in June. So far, it hasn't. As recently as last week, SIPC's chairman sent a letter to one member of Congress saying SIPC disagrees with the SEC's decision.

Sen. David Vitter, R-La., had been trying to arrange some sort of settlement between the SEC and SIPC. Those efforts apparently fell through.

"The SEC needs to take definite action before the end of the year, and I'm afraid that's going to mean suing SIPC," he told SEC Chairman Mary Schapiro.

The SEC, of course, is making up for past mistakes. Having bungled earlier investigations into Stanford, it then took more than two years to reach a decision on SIPC coverage.

It may be getting tough now, but suing SIPC means investors, who have been strung along for almost three years, must wait even longer to find out if their losses are covered. Sadly, in this case, that's progress.

Grant Thornton Webinar Presentaion

If you were unable to listen to the Webinar Online Presentation for the creditors/victims on December 7 at 11:00 a.m presented by Grant Thornton, then please go to http://www.sibliquidation.com/ 24hours after presentation where you will have the opportunity to listen and read a full transcript in both English and Spanish. You will also be able to see a tour of the SIB offices by Marcus Wide and see the amount of paperwork they are having to deal with and the amount of files that have to be looked at and checked.


Please listen to the presentation and it will be explained to you why (and how) you need to register your claim with Grant Thornton as well as Janvey. Why Grant Thornton feel it is so important that they are recognised by the American courts. Why Grant Thornton feel it is in the interests of the victims to have them deal with distribution of the funds that are frozen by the DoJ as opposed to the DoJ distributing these funds. Plus lots more information that victims will find useful.

Marcus Wide and Hugh Dickson from Grant Thornton clearly have the best interest of the victims at heart and are working in a professional way to try and achieve maximum results for all victims.

Kate

US-Committee in opposition to Grant Thornton

Stanford International Victims find it necessary to make the courts aware of how strongly we support the recognition of Grant Thornton. We must let the court know that we have no trust or faith in Janvey and the "Official Investors Committee." If you have not yet signed the petition that will be filed with the courts and the U.S. government, please do so because there is still time. This committee speaks only for themselves and for U.S. investors, we must make the courts aware of the international investors feelings.

Notice how the committee sign themselves as the "US-Committee" speaks volumes, it appears even they acknowledge they don't represent the interests of International victims.

December 5, 2011
By the US-Committee

The Official Stanford Investors Committee (the "Investors Committee") submits this brief in opposition to the Petition for Recognition of Foreign Main Proceeding Pursuant to Chapter 15 of Bankruptcy Code (the "Petition"). The Petition was originally filed by former liquidators, Nigel Hamilton-Smith and Peter Wastell, and is now championed by Marcus Wide and Hugh Dickson (the "Joint Liquidators").

The Investors Committee respectfully urges the Court to deny the Joint Liquidators any form of recognition under Chapter 15. Any recognition of these Joint Liquidators would be "manifestly contrary to the public policy of the United States". That is so for at least four separate reasons.

First, the appointment of the Joint Liquidators (and their predecessors) was pursued and obtained in violation of this Court's Orders. Granting these Joint Liquidators any form of Chapter 15 recognition, under these circumstances, would undermine fundamental regulatory and jurisdictional policies of the United States.

Second, there are significant conflicts of interest raised by the Joint Liquidators's request for recognition as the "foreign main" proceeding. The Receivership Estate has significant claims against the Antiguan government that will likely be frustrated (or abandoned) if the Joint Liquidators achieve "foreign main" recognition. The Investors Committee believes those conflicts are exacerbated by the multiple representations that have been undertaken in this proceeding by counsel for the Joint Liquidators.

Third, the recognition sought by the Joint Liquidators should be denied because it is very much a "one-way street." The Antiguan courts have already refused to recognize this Court's Receiver, finding both that the Receiver has "no legal entitlement to standing in Antigua and Barbuda" and that this Court's Order appointing the Receiver and taking sole possession of the assets of the various Stanford entities, including SIBL, was "unenforceable."

Fourth, recognition should be denied because it has become painfully obvious that the Antiguan government and the Antiguan judicial system have no real interest in prosecuting the individuals responsible for the Stanford fraud, nor in recovering assets for the benefit of Stanford's investor-victims.

How Many Members does SVC Actually Represent Continued

It seems the SVC has become acutely aware their claim to representing 4000 victims is in question. After a year or more of being ignored victims have miraculously started receiving emails from Angela, unfortunately its to little to late as can be seen by the comments from the victims.

Richard
Senior Member
Mon 21 Nov

I received the following message from Angela since it went on the blog. The first I have heard from her this year. I wonder how many more have had their membership revoked, for what reasons, and whether the numbers she claims reflect the SVC's reduced status.

I have received notification you did not receive notice that your membership in the Stanford Victims Coalition had been revoked. The SVC reserves the right to revoke membership at any time, without notification.

Patron1
Senior member
Tues Nov 22

I also just received an Email from Angela, here is my reply:

Hi Angela,
with all respect I would like to remind you that I do not belong to the Stanford Victims Coalition since 2 years ago.
I do not receive any SVC-Newsletter since 2 years ago, and I remember you have sent an Email more than 1 year ago writting that you will represent only the us-victims.

If you would like to send some information under the name of the "Stanford Investors Committee", then you are welcome to do it but please not under the name of "Stanford Victims Coalition".

P.S. when you say that you represent 4.000 international victim, I hope my name is not included there; otherwise please say "3.999 international victim"
Thank you!

Grumpy
Junior Member
Tue Nov 22

Yes .....strange isn't it
I also received the email yesterday after about 18 months silence

alfonso
Junior Member
Tue Nov 22

The same happened to me. I replied in the same way as other member did it. Everybody must reply to her like was done above.
I dont trust anymore the Committee and of course neither Janvey. What about Little? He never did his job, he is only getting a check every end-month!

IlianaF
Junior Member
Tue Nov 22

I am really without words...
I have the same situation like all you.

Wisea
Senior Member
Tue Nov 22

I've gotten, few hours ago, the same SVC e-mail.
I wonder I'm eligible now for SIPC, along with ALL the victims, worldwide

alphaandomega
Junior Member
Tue Nov 22

I also received the email from Angela including the letter sent to the DOJ as an attachment. The last time I received an update from her was back in January this year, explaining how to file the claim against the SEC.

Carola
Junior Member
Tue Nov 22

I have received the same mail in February on this year, from angela, and yesterdey the same as everybody did.

was_calm_cool_investor
Senior Member
Sun Nov 27

She excluded me from her mailing list a long time ago - even though she got substantial amounts of money from me for her efforts- As she mentioned to me from day one when she stared all this was :
She did not want international victims to get a penny - her campaign was only directed to help a few and mostly for her family. Her excuse was that the USA government would not feel good about paying to foreign investors 7 Billion - Therefore, she was pressing only for a few under a very limited spectrum – Such as Brokerage accounts in Houston only – as she has 8 accounts each one for $500,000 opened in Houston - feel sorry she lost that money but, I also lost $1.5 million in only one account.
I am not member of SVC which such low moral standards and I qualify equaly for SIPC regardless
Article by Stanfords Nemesis

How Many Members does SVC Actually Represent?

One of the reasons Judge Godbey cited for denying the Motion to Intervene is that the Stanford Victims Coalition claims to represent 4,000 members in 50 countries.

As an investor who once joined the SVC forum, and hence became an SVC member, I have not been informed by the SVC I am no longer a member, yet have received no communications from the SVC for at least 18 months.

How many more of us are there who joined the SVC via it's forum but have been effectively dis-communicated?

If there are any other SVC members who have not received regular communications for some considerable time, please reply to this thread on the Stanford Victims Forum at: http://svg.creatuforo.com/ or post your name in the comments section here on the blog.

Please take the time to respond as it may be important.

Richard


H-A
Senior member
Posted: Thu Nov 17, 2011 5:15 pm

Hi Richard
Like you I was an SVC member, and have not heard from them for a long time.
___________________________________________________________

Wisea:
Senior Member
Posted Nov 17, 2011

I also joined the SVC long time ago and I'm thinking seriously I'm still a member of it. Never have been informed the contrary by dear Angel
___________________________________________________________

The Admin Stanford International Victims Forum
Fri 18th Nov:

I also was a member of SVC. However I dont receive any newsletter since almost 2 years ago.

Anyway, there is an Email from Angela where she wrote she does not represent any longer the international victims...

Please do not forget that in the old Forum there was plenty of SPAM done by "registered members". Those members were never deleted, therefore the number of "registered members" in the old forum grow up until reach more than 4.000 "members". There you have the so called by Angela: "Representation of more than 4.000 victims"

We need to stop all this lies and manipulation!
__________________________________________________________

Maribeo
Posted: Fri Nov 18, 2011 10:16 pm

I was also a SVC member. When the forum was "desactivated" Angela stopped sending the bulletins by email or any information . Definitely I am clear she and SVC doesn't represent me. I also wrote to her a letter asking for answers, I am still waiting for a response. I have the feeling that we were useful for her original purposes and now we are disposables.

Maribeo
_________________________________________________________

WikiLeaks-Stanford
Junior member
Posted: Sat Nov 19, 2011 4:19 am

I can write the same. I did not receive any response from Angela, Mr. Little (suppose to keep the victims informed), nor Dr. Peter.

The old forum was shut down to keep most of the victim outside any discussion or information; in that way "they" can do whatever they want for their own benefit.
__________________________________________________________

gmrantigua
Junior member
Posted: Sat Nov 19, 2011 2:00 pm

Afternoon Everyone
Yes we are also in the same position. Joined at the very beginning but have received no communication for at least 18 months

Regards
GMR
_________________________________________________________

Victim
Junior member
Posted: Mon Nov 21, 2011 7:45 am

Also a member of SVC but no newlsetters for around 18 months ..... and I had previously made a donation to the group towards an open letter in a USA newspaper.

I guess I am not surprised by Shaw's actions. I have learned a lot about human behaviour in the last few years.
___________________________________________________________

WENDYANNE
Senior member
Posts: 663
Posted: Thu Nov 17, 2011 10:32 pm

Count me in, Angela decided a long time ago that she did not want me to know what she was doing.

And this is why we need signatures on the petition, to show we are not just one or two disgruntled victims (as Judge Godbey said) but that there are hundreds of us and that we have been ignored and disenfranchised by Angela and the committee.
___________________________________________________________

Stanfords Nemesis
Senior member
Posted: Mon Nov 21, 2011

Count me in, I also seen to be persona non grata. Have not received anything from SVC for nearly 2 years. Guess we were all taken for a ride by Angela to make up the numbers so she could “appear” to be representing many when in fact she represented few. Once on the committee her true motives came out and she sent the letter saying she would only represent the Americans. Why am I not surprised?

Receivers motion to establish bar date for claims

1474 Receiver Motion to Establish Bar Date for Claims

Looks like all the class actions are going to be thrown out thanks to SLUSA!!

Proskauer, Chadbourne off the hook in Ponzi scheme class action

Davis Polk & Wardwell and Paul, Weiss, Rifkind, Wharton & Garrison had to make a key strategic decision when they moved to dismiss a securities class action accusing Proskauer and Chadbourne & Parke of abetting R. Allen Stanford's Ponzi scheme. The firms had a veritable arsenal of defenses to deploy: qualified immunity because the law firm defendants were acting as counsel to Stanford; no evidence of fraudulent intent by the law firms; no duty to Stanford's investors. But the first defense both Davis Polk and Paul Weiss chose to assert in motions to dismiss on behalf of Proskauer and Chadbourne was more technical. The Dallas federal court class action, they asserted, had to be dismissed because the Securities Litigation Uniform Standards Act of 1998 pre-empts its claims, which were all grounded in Texas state law.

"Putting aside the absence of any viable federal claims," wrote Proskauer's counsel from Davis Polk, "because plaintiffs have chosen to bring their claims not only on their behalf, but also on behalf of a putative class, their claims are barred by SLUSA, and they cannot 'be maintained' as a class action in this or any other court."

The strategy turned out to be a good one. On Friday U.S. District Judge David Godbey of Dallas federal court dismissed the class action without granting leave to appeal. The case, he said, was precluded by SLUSA. You have to give class counsel from Castillo Snyder and Strasburger & Price credit for trying to get around the U.S. Supreme Court's 2008 ruling in Stoneridge v. Scientific-Atlanta, which pretty much cuts off federal securities law claims against the law firms, auditors, and investment advisers to accused fraudsters. The allegations against Chadbourne and Proskauer all involved the advice that Stanford counsel Thomas Sjoblom (who lateraled from Chadbourne to Proskauer after he began representing the Ponzi schemer) gave to his client. The class didn't offer evidence that either of the law firms communicated directly with Stanford's investors -- the standard they would have had to meet to bring federal securities claims.

So instead, the amended class action complaint against Sjoblom, Chadbourne, Proskauer, and a former Stanford general counsel was based on Texas's state securities laws. The complaint claimed that former Securities and Exchange Commission enforcement lawyer Sjoblom -- and, by extension, the firms at which he practiced -- should have known Stanford was running a Ponzi scheme, but helped keep him afloat nonetheless.

If Stanford had been trading stock, it would have been a no-brainer for Davis Polk and Paul Weiss to cry SLUSA. He wasn't. Stanford sold investors instruments he called CDs from the Antiguan bank he controlled. These CDs functioned as mutual or hedge fund shares. But it wasn't entirely clear that they fell under SLUSA's definition of securities, which is limited to instruments traded on a national exchange. Davis Polk argued that because Stanford investors liquidated stock and bond holdings in order to purchase Stanford CDs -- and because Stanford claimed that the CDs were backed by stocks and bonds -- the Stanford instruments fell under SLUSA's definition of a covered security.

Because Godbey agreed, he never even reached the other defenses Proskauer and Chadbourne -- and, for that matter, other Stanford defendants whose motions to dismiss he granted on SLUSA grounds -- might have argued. Proskauer counsel James Rouhandeh of Davis Polk declined comment, as did Chadbourne counsel Daniel Beller. I left a message with class counsel Edward Snyder but didn't hear back.

Press Release from Stanford International Victims Group

Stanford

INTERNATIONAL VICTIMS

GROUP

SEEKING JUSTICE FOR 21,000 VICTIMS WORLDWIDE

The Stanford case:

International Victims Charge

America to Play Fair

PRESS RELEASE

In 2009 on the heels of the Madoff fraud, the Ponzi scheme operated by R Allen Stanford was uncovered which has received widespread media coverage in the United States. What has not been widely reported is that only 4,000 of the 21,000 victims worldwide are US citizens. The remaining 17,000, the vast majority, are innocent victims from around the globe, who all have one common cause; to recover their life savings, stolen by the US citizen R Allen Stanford, under the guise of his Stanford Financial Group, based in Houston, Texas, and regulated by the United States Securities and Exchange Commission.

It is now almost three years since R Allen Stanford was charged with fraud and his various enterprises wound-up and sold by the US court appointed receiver Ralph Janvey. Yet to date there has been no distribution of any funds recovered by the receiver, nor even a mechanism created whereby those funds can be fairly distributed equally among all the innocent victims, some of whom have lost their homes and become ill, while others have died waiting. Meanwhile the receiver, his general counsel, Kevin Sadler of Baker Botts, and the other advisors he has engaged are consuming all the available funds they have collected.

Further, in the United States there has been no recognition that anyone but US voters and taxpayers have been harmed by this massive fraud, perpetrated by a US citizen, based in Texas, where officials of the US regulator preferred to spend their time at work watching porn instead of taking the enforcement actions they were charged with, against a business they knew to be a fraud.

The failure of the SEC in detecting the Madoff Ponzi scheme has been well reported and investigated, yet some of those SEC officials who missed Madoff knew as far back as 1997 that Stanford may be a fraud. The Stanford empire was investigated by the SEC on at least four occasions, first in 1997, and they concluded even back then it was likely a massive Ponzi scheme, yet no action was taken, as the SEC did not think there were any American investors, consequently they permitted the fraud to continue and grow exponentially for a further twelve years, abandoning 21,000 innocent victims to their fate, simply because they believed it did not concern US interests. How wrong could they be, and how prejudiced in their negligent disregard for their duties.

The SEC have been investigated for their failure to detect the Stanford fraud, and heavily criticized. Their own Inspector General has stated that the depth of their failure is unbelievable; and US congressmen have claimed that the debt they owe the Stanford victims is enormous, and have demanded that they should act swiftly, so families whose retirement and savings were stolen as a result of greed and government failure can begin to rebuild their lives.

Following the investigation, earlier this year many hundreds of innocent Stanford victims worldwide filed protective claims against the SEC for negligence under the Federal Tort Claims Act. The SEC have had their allotted six months to respond, yet remain unconscionably silent, with no regard for the consequences of their complicity, or the demands of elected officials.

Now the SEC find themselves and their appointed receiver once again under investigation, for the way they have conducted this receivership.

The Securities and Investors Protection Act was passed by congress to provide a fund to repay innocent victims of US securities fraud, irrespective of their nationality or place of abode. It gave the registered broker/dealers a veneer of respectability and investors the comfort of believing there was a safety net should the worst happen and any of the US financial advisors they trusted turn out to be liars, crooks, or thieves.

It has taken the SEC two years, under considerable political pressure, to instruct SIPC to do the right thing, yet we now learn the number of innocent victims who believed they were eligible for compensation may be limited further, and that SIPC themselves may raid the receivership estate, to recover their losses at the expense of the remaining victims.

Whenever innocent foreign victims of the Stanford fraud have asked for recognition in the United States, invariably they have been told that Stanford operated his fraud from the small Caribbean island of Antigua, and what right have they to expect that US authorities and officials have any obligation or other moral duty to extend assistance. The tentacles of the Stanford empire stretched halfway around the globe and in each of its outposts was portrayed as a safe, stable, and conservative institution backed by a major Texas based group, regulated in the US, who claimed to extend protection to investors worldwide equivalent to that benefiting US citizens. Further, R Allen Stanford, the founder and sole shareholder was compared by Forbes to the likes of UBS and Wachovia, and accredited him as one of the United States 400 wealthiest individuals, with a portfolio of $51bn under management. After the president of the United States, George W Bush, and a raft of US senators and congressmen also lent Stanford their endorsement, how could his credibility possibly be questioned further?

At the request of dissatisfied victims of the Stanford fraud, the courts have recently appointed two very experienced directors of Grant Thornton as joint liquidators of Stanford International Bank, and charged them to recover and distribute, fairly and equally, and in the shortest possible time, the losses stemming from the Stanford Ponzi scheme. Grant Thornton have been recognized as the most proper person to recover losses stemming from the Stanford fraud, with the best chance of success by courts in every jurisdiction worldwide, except in the United States, where the receiver, Ralph Janvey, and his ‘official’ investors committee, comprising mainly self-interested attorneys, have contrived to establish a network of vested interests which serve primarily to benefit themselves, and through which they have reached an agreement whereby they may charge excessive fees which may run to hundreds of millions of dollars, all at the expense of all the innocent victims. Grant Thornton has strived to reach a workable protocol with Janvey for the benefit the innocent victims, yet the vested interests in the US continue to block any agreement from being reached.

There are frozen funds overseas, to the tune of $250m that Grant Thornton wish to recover and distribute equally, transparently, and quickly, to all the Stanford victims worldwide, yet they have been further blocked by the United States Department of Justice, who seek to ‘repatriate’ those funds to the US, to be distributed; how? These are funds that did not originate from the US yet the DoJ insists that US minority interests should once again be given preferential treatment.

The perpetrator of the fraud R Allen Stanford still awaits trial in Texas. Unlike Madoff he has not confessed, but pleads the fifth amendment; has changed attorneys as frequently as changing his socks; claimed incompetence; drug addiction; and now memory loss; what next? His trial has been postponed twice, and is now due to be heard in January 2012, meanwhile many of the initial charges have been dropped, and there are some who believe he may soon be granted bail, and conveniently disappear.

In a recent twist many of the lawsuits that may eventually benefit the victims of this fraud, already delayed two years due to restrictions imposed by the judge appointed by the DoJ to hear the criminal case against Stanford; may now fail entirely, following a ruling by another judge; appointed by the SEC to preside over the civil case, again all at the expense of the innocent victims.

Enough is enough. The United States authorities and institutions have failed us all, not just US citizens, and we all deserve to be treated equally. We have all seen our entire life savings stolen by a US citizen who was permitted to operate for years due to the negligence of the US regulator, and we now find US court appointed officers determined to line their pockets at the further expense of the innocent victims, and through political pressure, place US citizens in a preferential position, while the perpetrator of the fraud continues to mock us all.

It may not appear so to the US victims of this fraud but the world is watching just how self-interested and what blatant disregard some fficials and citizens of the US appear to have for anyone but themselves.

All 21,000 innocent Stanford victims lost their life savings in this massive fraud. All the foreign victims ask is to be treated with fairness, equality, and with due respect. No more humiliation and injustice. Is it too much to ask that the officials of the world’s most powerful, wealthy, and technologically advanced nation show some integrity, accept responsibility for the consequences of their complicity in the Stanford fraud, and make due recompense without further delay to each and every victim regardless of class, creed or citizenship.

Stanford Judge Says Receiver May Need to Conclude Search for ‘Pot of Gold’

By Laurel Brubaker Calkins and Andrew Harris

R. Allen Stanford’s court-appointed receiver may need to stop searching for a secret “pot of gold” and pay defrauded investors from the assets he has recovered so far, the judge overseeing the case said.

“I’m concerned the receiver is expending resources that could otherwise be distributed to investors trying to track down missing resources,” U.S. District Judge David Godbey said during a hearing today in Dallas for dozens of Stanford-related civil cases.

Stanford, 61, was sued by the U.S. Securities and Exchange Commission in February 2009 on claims he swindled investors of more than $7 billion through allegedly bogus certificates of deposit at his Antigua-based Stanford International Bank.

“If we knew where it was and were able to go get it, we would have,” SEC attorney David Reece told Godbey, referring to Stanford’s missing billions.

“When the U.S. Justice Department has already checked and there’s no pot of gold, then the receiver can stand down,” Godbey told lawyers for the receiver and investors. “There’s apparently not some trail to a $5 billion secret Swiss bank account that anyone knows about.”

Awaiting Trial
Stanford, who denies all wrongdoing, has been in custody as a flight risk since his indictment on parallel criminal charges in June 2009. He is being treated for a prison-acquired addiction to anxiety drugs while he awaits trial, set for January in Houston federal court.

Godbey told lawyers in Dallas today he’s concerned that receiver Ralph Janvey is duplicating efforts by U.S. prosecutors, who are also tracking Stanford’s assets overseas. The Justice Department has won administrative freezes on more than $300 million in Stanford-related bank accounts in Switzerland and the United Kingdom. These accounts are beyond Janvey’s control and may represent the receivership’s largest category of recoverable assets, according to court filings.

The Stanford receivership has about $100 million in unrestricted cash on hand, Kevin Sadler, Janvey’s lead lawyer, told Godbey today. This represents proceeds from the sale of virtually all of Stanford’s U.S. real estate and private equity holdings, after payment of the receivership’s fees and expenses.

Antigua, Barbuda
Stanford owned additional real estate in the Caribbean nation of Antigua and Barbuda, which is under the control of a separate liquidator appointed by that nation’s government. Lawyers for Janvey and Stanford’s Antiguan liquidators told Godbey today that they can’t agree how to share control of Stanford’s island properties and investor records located in Antigua.

“The U.S. receiver has liquidated 95 percent of what the receiver has control over that’s sellable,” Sadler told Godbey. “We’re basically out of the real estate business and the private equity business. We’ve got some lawsuits that’ll go on for years. And we’ve got some cash, but not enough to distribute right now because of the cost.”

Sadler said if the U.S. receiver gained control of the frozen U.K. and Swiss bank accounts and sold the Antiguan real estate, then there might be enough cash to justify the cost of creating a claims process to distribute recovered assets to investors.

“It’s not going to get cheaper the longer you wait,” Godbey told Sadler.

‘In Limbo’
“If we leave this just in limbo for another two or three years waiting to see if there’s a bigger pot of money, it may be difficult for people to put together claims,” Godbey said. “The prospects of finding a secret Swiss bank account with $5 billion in it is not something you’re holding out much hope for.”

The U.S. receiver and an official investors’ committee have filed more than 100 fraudulent transfer and aiding-and-abetting lawsuits, seeking to claw back proceeds from CD investors or payments to vendors, consultants or financial advisers who worked with Stanford’s companies. Court filings estimate these actions, if successful, could return as much as $500 million to the estate.

“We’ve sued everyone we can find,” Sadler told Godbey today.

Godbey asked the receiver for a plan detailing “what needs to be done to bring this to a conclusion and what it will cost” to complete the task of repaying Stanford’s investors. He didn’t set a timetable for further action on the matter

As Stanford Victims Grumble, Court Approves Receiver's Latest Fee Request

by Julie Triedman

On Tuesday, the Dallas federal district court judge overseeing the receivership of alleged Ponzi schemer R. Allen Stanford's collapsed financial empire of approved the latest $1 million in legal fees requested by receiver Ralph Janvey and the outside law firms advising him.

But while Janvey and his team keep drawing regular paychecks in connection with their recovery efforts on behalf of Stanford investors, as The American Lawyer reports in its October issue, much about the proceedings and Janvey's future role in them remains uncertain.

Federal district court Judge David Godbey is expected to rule soon on a July motion to intervene filed by a group of disgruntled Stanford investors who claim their interests are not being adequately represented by the committee appointed by Janvey to fill that role.

Those moving to intervene accuse the lawyers serving as members of the committee of "double dipping" in the estate because they were paid retainers up front by individual victims and are also eligible under their contracts with the receiver to collect large contingency fees based on what they recover.

Since early this year, Janvey has tapped the committee to take over a number of fraudulent conveyance claims he and his team originally developed, removing the day-to-day expense of litigating those claims. Janvey told the judge in court filings this past summer that he did so as a cost-saving measure.

Janvey's recovery efforts in the case continue to move slowly. To date, of the estimated $7.2 billion lost via Stanford's alleged scheme, the receiver's legal team has recovered just over $146 million. (Another $63 million was sitting in Stanford accounts the day Janvey was appointed.)

Much of the total recovery has already been spent on a combination of legal and professional fees ($50 million) and expenses ($50 million). A majority of the legal fees have gone to one firm, Baker Botts, where Austin-based litigation partner Kevin Sadler is heading up the firm's efforts.

U.S. investors who bought bogus certificates of deposit via the Stanford brokerage entity—a group that includes only a fraction of the 20,000-plus investors harmed by Stanford's alleged worldwide scam—are also waiting impatiently on a forthcoming decision by the Securities Investor Protection Corporation on whether they are entitled to relief for their losses.

SIPC officials said in June that the agency expected to issue its decision in the matter by mid-September. On September 16, however, SIPC Chairman Orlan Johnson announced that the agency's board was delaying a decision pending further review "of the many and complex issues in the Stanford case." Johnson, who is also the co-chair of Saul Ewing's securities transactions and regulations practice group, did not respond to a request for comment.

Committee Struggles to find support

It would seem that the ONLY TWO letters of support for the Committee, come from TWO MEMBERS of the committee being criticised…how sad is that?


UPDATE ON STATUS OF MORGENSTERN STANFORD-RELATED CASES; CONTINUING RECOVERY EFFORTS AND CASE DEVELOPMENTS

October 7, 2011

Some of you have undoubtedly been reading and hearing negative and untrue comments about the efforts we have undertaken, both as lawyers and as members of the Official Stanford Investors Committee, to recover your lost investments. Much of the misinformation and what I believe to be defamatory statements have been sourced to individuals and attorneys who are apparently seeking through misleading tactics, to insert themselves into the case, and to unfairly portray events and likely results for their own benefit and not for yours (in my view). I assure you again that there is no greater priority for us than to seek the maximum financial recovery for you in the shortest period of time. My colleagues and I are working tirelessly to accomplish that end.

We will be having an Investors Committee meeting and will be participating in a number of official court hearings and conferences next week in Dallas. I will provide you with a more detailed update shortly thereafter. In the meantime, I thought it would be helpful to share two letters sent by leaders of the Stanford Victims Community to a reporter who recently published an article about the case. I think the letters fairly capture the reality of the situation.

Please note that I have now officially joined a new law firm Butzel Long, p.c. which is a 150 lawyer firm with substantial resources which I intend to utilize in connection with the continued prosecution of these cases. My new email address is morgenstern@butzel.com and my new direct phone number is: 212-374-5379. The core team that has been working on this matter will remain the same but we will add additional personnel as required. Please feel free to contact me with any questions or concerns.

Peter D. Morgenstern



Ms. Triedman,

I just read your column about the Stanford Ponzi scheme Receivership debacle and was very disappointed to see the grossly defamatory allegations Gaytri Kachroo made about the Court-appointed Investors Committee lawyers. Those lawyers have spent hours a day for well over a year researching and filing claims the Receiver didn’t. There are also numerous tolling agreements that are not public that could result in substantial recoveries for the investors. Unlike the Receiver, the Committee lawyers do not bill for their time and are working purely on a contingency-fee basis for the cases they have filed for all Stanford investors. If they don’t win those lawsuits, they don’t get paid. There is also a tremendous amount of work those lawyers engage in on behalf of the investors that will never result in any compensation – like working with various government agencies on their investigations and other matters that will affect the case.

Separate from their work on the Investors Committee, the three U.S. plaintiff’s lawyers on the Committee worked for 18 months on filing class-action lawsuits on behalf of their clients who may have paid them a small retainer fee. Those cases--and the other work those lawyers do for their clients like filing claims, keeping their clients updated on the case, representing their overall interests in all matters of the case—are completely separate from the work those lawyers do on behalf of the estate. It is a gross misrepresentation to allege the Committee lawyers are “double-dipping” or taking further advantage of Stanford investors.

The Investors Committee lawyers are the biggest advocates Stanford investors have. I know this because I also serve on the Investors Committee with them as one of the two investors. I see the voluminous daily communications, the countless meetings, the invaluable institutional knowledge they bring to the case, their frustration with the complexities involving the Receiver and other matters that absolutely demonstrate without question their interest is in helping Stanford victims recover and not in lining their own pockets. In many ways, the lawyers have also invested with Stanford and they won’t recover anything until the victims do.

I suggest reading the Committee’s response to Ms. Kachroo’s motion to intervene (attached here). If you still think Ms. Kachroo’s allegations have any merit, I also suggest contacting Robert Roseman, the lawyer who is suing Ms. Kachroo on behalf of a previous client.
Sincerely,

Angela Shaw
Director and Founder
Stanford Victims Coalition


Dear Ms. Triedman,

I have just read your article in the 'American Lawyer' regarding the Stanford Ponzi scheme. In particular, it was quite disappointing to see you include such a lengthy paragraph filled with criticism of the individual attorneys on the Investors' Committee (IC).

Unfortunately, when you describe Ms. Kachroo as prominent, it implies to your readers that this somehow gives her credibility in the Stanford case. Ms. Kachroo’s involvement in the Madoff case has absolutely no relevance to the Stanford case. The two cases are at opposite ends of the spectrum. Ms. Kachroo represents a relatively very small group of people. Ms. Kachroo became involved in the Stanford case very late in the game. The paragraph that you dedicated to her in your article acknowledges to me that she remains far from up to speed on the activities of the Committee attorneys.

Beyond the substantial amount of time that these attorneys spend on their own Stanford cases (that may or may not result in payment), these attorneys spend an immeasurable amount of time and expertise on efforts dedicated solely to the Stanford victims. With no compensation at all.

There are multiple daily calls, conference calls, emails, court filings, Receiver exchanges, etc among the IC members. There are evening and weekend calls and mailings. Many if not most of these calls are centered around issues unrelated to the lawsuits referred to in your article, but rather on other issues that need looking after on behalf of all victims.

There have been countless trips (personally paid for) to various cities for meetings with numerous government agencies, politicians, Antiguan liquidators, and others…. all on behalf of all Stanford victims yet unrelated to lawsuits.

My name is John Wade. I am a veterinarian by trade and a victim of the Stanford crime. I am also founder of the Louisiana Stanford Victims Group and represent (sadly) 1800 victims in my state. Lastly, I sit on the Investors' Comittee on behalf of my fellow victims. I have been involved almost daily with the attorneys maligned in your article. I can assure you, that it is undeserved. Not only given valuable time, expertise and effort to the Stanford victims' plight, but they have done so in a manner that in my opinion elevates the standard of their profession.

John Wade, DVM

Stanford victims outside of US and Antigua want justice too

CARACAS, Venezuela, Friday September 30, 2011 – A three-person organisation has stepped up to represent over 20,000 people across 112 countries who were victimised when the ponzi scheme of former Antigua-based banker Allen Stanford collapsed over 2 years ago.

The Texas based leader of the organisation, has denounced authorities in the United States and Antigua for what they see as a deliberate disenfranchisement of Stanford victims outside of those two territories.

In a press release, The Texas based leader, stated that he had sent a letter to the new Joint Liquidators of Stanford International Bank Limited Marcus Wide and Hugh Dickson on September 18, copied to the US Receiver, his litigant attorney and to the Official Stanford Investors Committee, to express its indignation at the “dishonest handling of the Stanford Ponzi scheme in Antigua and the United States”.

“Since the SEC filed the civil lawsuit against R. Allen Stanford, his companies and related parties in February of 2009, the organisation has persistently begged the US Receiver and SIBL’s Joint Liquidators, through letters and press releases, to set aside their pettiness and economic interests in order to end the shameful game of “cat and mouse” that has wasted the Stanford victims’ patrimony in a never-ending carousel of litigation's as a result of their irrational pursuit to control the assets.

“It is unacceptable that the Courts in Antigua and the United States, in detriment to the Stanford’s victims, have allowed the Joint Liquidators and the Receiver, who were named to prevent the waste and squandering of the creditors' patrimony, to continue fighting for the assets - duplicating costs and efforts, and hindering the possibilities of a pro rata distribution of the victims’ patrimony,”.

The Texas based leader went on to accuse authorities in Antigua and the US of conspiring to allow Stanford “to keep a fraudulent financial empire alive for more than a decade”.
The organisation’s leader went on to say: “We perceive that the case has been managed with very little transparency. We are concerned that the joint liquidators and the receiver continue to be a part of the problem and not a part of the solution. Why prolong the agony of the victims for a jurisdictional battle?”

In the letter, the organisation’s members went on to beg the joint liquidators of and the US receiver to establish a cross-border insolvency cooperation protocol without any further delay.

Statement from Dr Kachroo Regarding SLUSA Ruling by Judge Godbey

From Kachroo Legal Services:
9th September 2011

Last week, Judge Godbey ruled that a particular federal statute precludes many, if not all, of the class action lawsuits filed against certain financial institutions sued in connection with the Stanford Ponzi scheme. This will result in the dismissal of the majority of class actions filed by the Investor Committee and the Receiver. This will not, however, preclude a class action lawsuit against the SEC or affect any individual Stanford-related lawsuits that were not brought as a class action. There is a maximum number of plaintiffs that can now bring an action under state law claims, even separately.

The particular statute at issue is the Securities Litigation Uniform Standards Act (“SLUSA”). SLUSA generally bars any class action lawsuit which is based on state law (not federal law) and involves allegations of misrepresentations in connection with the purchase or sale of securities. Although there was a lengthy debate over whether the Stanford Ponzi scheme involved the purchase or sale of “securities,” as defined by SLUSA, the Court ultimately ruled that even though the SIB issued CDs were not “securities,” the SLUSA preclusion applies for either of two reasons. First, SLUSA applies because investors were defrauded in connection with the purchase or sale of what they believed were securities. Second, SLUSA also applies because many investors sold securities in order to purchase the SIB CDs. Under either scenario, the Court ruled that SLUSA precludes class actions against such financial institutions which are based on state law. Because the majority of class actions filed by the Investor Committee and the Receiver are based on state law, these lawsuits will be dismissed with prejudice.

However, a class action lawsuit against the SEC is not the type of action precluded by SLUSA because it does not involve allegations of misrepresentations by the SEC in connection with the purchase or sale of securities. There is a chance if there is enough support for the same that Kachroo Legal Services, will contemplate an appropriate way to take measures against the financial institution (s) implicated in the Stanford debacle. If you have questions about this lawsuit or about seeking legal representation, you may contact Gaytri Kachroo directly, who is also handing the class action against the SEC on behalf of all investors.

Dr. Gaytri D. Kachroo
PRINCIPAL
KLS-Kachroo Legal Services, P.C.
219 Concord Ave.
Cambridge, MA 02138
Direct: 1-617-864-0755
Facsimile: 1-617-864-1125
Mobile: 774-232-2865

Statement from the Stanford Investors Committee

STANFORD INVESTORS COMMITTEE

SEC vs. Stanford International Bank, Ltd., et al (No. 09-298)

United States District Court, Northern District of Texas

STATEMENT IN RESPONSE TO U.S. DISTRICT COURT’S DECISION

ON APPLICABILITY OF SECURITIES LITIGATION UNIFORM

STANDARDS ACT IN CLASS-ACTION LAWSUITS

On August 31, 2010, United States District Court Judge David Godbey issued an opinion potentially precluding the victims of the alleged Stanford Financial Group Ponzi scheme fraud from pursuing class-action lawsuits against third-party aiders and abettors under state law. While the opinion issued by the District Court is limited to the Louisiana lawsuit, "Roland v. Green" ("the Roland case"), the potential impact on other class-action lawsuits already pending on behalf of Stanford investors is significant.

In the District Court’s order, Judge Godbey held that the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) applies to the Stanford case, forcing the investor victims to either collectively sue third-party aiders and abettors under federal law or face dismissal.

But because federal law does not presently allow investors to sue for damages resulting from a third party's aiding and abetting in securities frauds like the Stanford Ponzi scheme, more favorable state law causes of action, such as those available under Texas Securities Act, have been applied in other cases to allow investors to recover losses.

Judge Godbey's decision appears to eliminate that alternative.

"It's difficult to imagine Congress intended for SLUSA to be used to outright deny defrauded investors their ability to sue aiders and abettors and co-conspirators of a Ponzi scheme" said attorney Edward C. Snyder, a member of the Stanford Investors Committee and one of the lawyers prosecuting some of the Stanford class actions. "The Investors Committee is concerned that the net result of the Court's decision in the Roland case may create a procedural and administrative nightmare for the Court, particularly if hundreds of individual lawsuits are filed as a consequence.”

“There are more than 20,000 Stanford victims, all of whom will demand their day in court. The class-action mechanism was created to streamline cases of this magnitude. We are disappointed in the decision, and hope to be able to address this issue further with the Court" said Snyder.

CONSOLIDATED REPLY TO RESPONSES BY SECURITIES AND EXCHANGE COMMISSION, RECEIVER, EXAMINER AND OFFICIAL STANFORD INVESTORS COMMITTEE

CONSOLIDATED REPLY TO RESPONSES BY SECURITIES AND EXCHANGE COMMISSION, RECEIVER, EXAMINER AND OFFICIAL STANFORD INVESTORS COMMITTEE TO KLS STANFORD VICTIMS’ MOTION TO INTERVENE AND FOR APPOINTMENT TO THE OFFICIAL STANFORD INVESTOR COMMITTEE

Intervention Reply (Filed Ver. With Exhibits)

Stanford International Bank Creditors’ Committee Urges U.S. and U.K. Authorities to Unfreeze Millions Immediately

Grant Thornton Press Release

Newly formed creditors’ committee is working closely with liquidators, but fears recovery efforts could stall if money isn’t released soon

ANTIGUA-July 13, 2011– Liquidators of Stanford International Bank announced today that its newly formed Advisory Creditors’ Committee is backing a proposal to urge the U.S. Department of Justice and the United Kingdom’s Serious Fraud Office to unfreeze critical funding to the estate immediately.

The Creditors’ Committee, which is currently made up of victims from six countries, says recovery efforts for over 21,000 creditors with $7.2 billion in claims will stall to the detriment of the estate unless money is released from the bank’s own accounts that have been frozen at the instigation of the DoJ for more than two years.
“The biggest single issue that we have facing us today is funding,” said Marcus Wide, who was appointed in May as liquidator of Stanford International Bank along with Hugh Dickson. “We have been in negotiations with the Department of Justice and Serious Fraud Office asking them to act quickly and release the money. At present we are optimistic as both DoJ and SFO have shown that they understand the nature of the difficulties facing our estate, and the potential impact on victims.Unfortunately the frozen assets have lost value while frozen and we fear they could continue to decline in value the longer they remain frozen. And more importantly the estate is presently without the money it needs to gather in and protect other assets to which the victims are entitled, and to fund the legal actions that can generate further recoveries for victims.”

“The Justice Department has frozen, at a cost to creditors, these funds which would otherwise have been handed over to the estate,” added Mr. Dickson. “It is the creditors’ money and it is unfortunate that it is not available to protect the creditors’ interests and generate additional recoveries in a situation which is otherwise rather bleak.” Approximately 99.7% of all 21,000 creditors of the Bank are holders of CDs that were victimized in R. Allen Stanford’s apparent fraud, according to the Liquidators.

The six-member Creditors’ Committee held its second meeting on July 7, 2011, and unanimously approved arrangements for alternate financing from commercial funders proposed by the Joint Liquidators urging the Antiguan Court to approve of that plan as well, so that the estate can do its job, although at greater cost to creditors, in the event that a portion of the frozen funds are not released. The High Court in Antigua has since approved the funding package in principle.

“This has been a trying time for all creditors and we have no time to lose in the recovery of our funds,” said Eric Cohen, a member of the Creditors’ Committee. “We all feel the sting of Stanford International Bank’s collapse, but we have faith in the approach Mr. Wide and Mr. Dickson are taking, and are pledging them our full support.”

Alexander Fundora, another member of the Creditors’ Committee and founder of a Miami, Fla.-based home health care company that lost $2.5 million in the Stanford scheme, said it is “hard to understand why the DoJ wants to retain control of our money and for it to expect the victims to absorb the expense of the commercial funding arrangements, when the bank’s own funds should be available at no cost. We urge the DoJ to release the funds immediately.”

Stanford International Bank failed in 2009 after top executives R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt executed a massive Ponzi scheme misappropriating billions of dollars of investor funds, according to U.S. prosecutors.

Mr. Dickson and Mr. Wide, who are employed by Grant Thornton, a global audit, tax and advisory firm, were appointed liquidators on May 12, 2011, replacing Nigel Hamilton-Smith and Peter Wastell by order of the High Court of Antigua.

By creating a Creditors’ Committee, the new liquidators are working to have an ongoing dialogue with creditors and to create a creditor-driven estate, something that didn’t exist under the prior administration.

“We will consult with creditors in the early stages as often as we can,” Dickson said. “At the end of the day it is their money. It is important that we have access to the insights, opinions and support of the people who we serve.”

Members of the Creditors’ Committee include Mr. Fundora, United States; Mr. Cohen, Canada; Ricardo Del Valle, Panama; Luis Lopez, Venezuela; Attorney Patrick Kelly of Minneapolis (for a group of Mexican creditors who lost $66 million), and a Swiss member. A seventh creditor, Mr Richard Watson of Antigua has recently been invited from a number of applicants to join the Committee. The Committee will meet regularly and will weigh in on major decisions.

“We have gathered a group of knowledgeable individuals who are geographically diverse and represent both large and small creditors,” Mr. Wide said. “We are convinced that working with the creditors will expedite the process of recovering assets.”

.

Stanford Investors Committee Reacts to Victim's Claims

Caribbean 360

Stanford Investors Committee reacts to victims' claims
It denies overseeing what the victims claims are excessive fees being charged by the receiver overseeing the gathering of assets to repay investors.

TEXAS, United States, Monday July 11, 2011 – The man who leads the committee set up last August to protect the interests of investors who lost money in Allen Stanford's alleged fraud has responded to some of the criticism leveled at the body in a motion filed in court last week.

In the court document filed by Kachroo Legal Services (KLS), the investors allege that court-appointed receiver Ralph Janvey had used up the majority of the money recovered on expenses.

It also said the Official Stanford Investors Committee, which was set up after a judge granted a request by the victims to give them a say in the recovery of assets, was among those not "acting as a check on the excessive fees and expenses compared to the minimal recovery, challenging the contingency fee arrangement, the operation of the receivership, and otherwise voicing concern over the ineffectiveness of this receivership”.

But in a statement made after the filing of the motion, Head of the Committee John Little - the Dallas attorney who also serves as a liaison between the court, the receiver and the creditors - said that "while the Committee does work in conjunction with the receiver's counsel and other professionals, it is not authorized to review the receiver's fees as KLS mistakenly alleges".

"The Official Stanford Investors Committee is absolutely committed to recovering the highest rate of return possible for Stanford's victims regardless of citizenship or nationality," added the court-appointed examiner.

As for the motion's other allegations and request that four Stanford investors represented by KLS be permitted to intervene and be appointed to serve on the Committee, Little has decided not to address that in the media.

He said the Committee would discuss the motion and respond appropriately via the court.

Little noted, though, that the seven members of the Committee were specifically chosen to represent the cross-section of the 20,000 victims of the US$7 billion alleged Ponzi scheme and that the Committee's members have been actively engaged in a broad range of activities on behalf of the victims, including substantial litigation against third parties and working with the U.S. government authorities overseeing the civil and criminal proceedings.

Along with Janvey and Little, the Committee comprises Ed Snyder, Ed Valdespino and Jaime Pinto Tabini, attorneys for Stanford investors in Mexico, Latin America and Peru respectively; Dr. John Wade, a customer of Stanford Trust Company; and Angela Shaw, a Stanford International Bank CD investor and director and founder of the Stanford Victims Coalition.

Stanford International Victims Group Press Release

SIVG Press Release