Kachroo Legal Services Update on SEC Lawsuit

TO ALL SEC CLIENTS
February 26, 2014

 Zelaya et al v. United States of America

 Dear Stanford/SEC Clients: We write to update you with respect to important information regarding the claim against the Securities and Exchange Commission.

 To read the complete update from Kachroo Legal Services Click Here:  

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

Kachroo Legal Services Update on Stanford Further Actions

TO ALL SFA CLIENTS

STANFORD FURTHER ACTIONS 

 Dear Stanford Clients:

 We write to update you with respect to important information regarding customer claims with the Stanford Liquidator in Antigua and Receiver in Dallas.

To read the complete update from Kachroo Legal Services Click Here:  

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

Kachroo Legal Services Stanford Update October 23rd 2013

STANFORD UPDATE OCTOBER 23rd 2013

TO ALL SEC CLIENTS
TO ALL SFA CLIENTS


Dear Stanford Clients:

We write to update you with important information regarding the claim against the SEC and


ZELAYA V. UNITED STATES OF AMERICA

As you may be aware, United States District Court Judge Robert N. Scola recently issued an order granting the Government’s second motion to dismiss the Plaintiffs’ complaint. This ruling comes despite the historic victory previously achieved in surviving the Government’s first motion to dismiss. The result of the order is that the lower court has made a final determination on the entire case and as such KLS is now in a position to appeal the entire case to the United States Court of Appeals for authoritative resolution of all issues.

To that end, KLS has filed a notice of appeal earlier this month, and will submit its full appeal brief in November. KLS will of course keep all clients up to date with developments in the case as they arise, including the approximate timeline of the appeal.


STANFORD FURTHER ACTIONS

In accordance with our previous updates, we would like to make sure that all clients are aware of progress with the Dallas receiver. By now, clients should have received:

1) A notice of Determination
2) A Certification Notice.


If You Have Already Received A Certification Notice

For those of you who have already received a notice directly, it is important to let us know as soon as possible so that we can assist you in processing your claim. Please forward any and all paperwork you have received from the Receiver. Please also sign the attached confirmation in order for us to be able to deal with the Receiver on your behalf directly.


If You Have Not Yet Received A Certification Notice

If you have not yet received a notice, we can check on the current status of your case on your behalf. To enable us to do this, please sign the attached confirmation. Please also be vigilant for any notifications sent to you directly by email as there are strict deadlines to respond.


If You Are Not Yet a Stanford Further Actions (SFA)

Client If you have not yet signed a retainer agreement with KLS, time is running out to submit and process these claims. If you would like us to deal with these claims to the receiver on your behalf, please sign the enclosed authorization form and or contact us with any queries you may have. We can then forward you our standard retainer letter.


SALE OF STANFORD INVESTORS’ CLAIMS

KLS is being solicited by a number of funds that appear to have increased their initial offers to acquire claims from Stanford investors to between 10 and 20 cents on the dollar (i.e. 10-20% of their claimed value). If any of our clients have an interest in pursuing such an offer, please advise us directly so we can facilitate discussions with these funds.

Very truly yours,

Gaytri D. Kachroo
Kachroo Legal Services, P.C.


Read More: http://sivg.org.ag/topic224.html 


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

KLS COMMENT ON ZELAYA DECISION

KLS will appeal the latest decision of Justice Scola of FLSD. Needless to say we are disappointed in the ruling as are the thousands of investors defrauded by Allen Stanford. 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.


However, this decision gives us an opportunity to squarely resolve this fundamental and historic jurisdictional hurdle so that the litigation can proceed without further review based upon an appeals decision in the fourth circuit.

Read More: http://sivg.org.ag/topic181.html

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

 

Kachroo Legal Services Update July 30th

Dear KLS Stanford SEC Clients,

We write to update you on the current status of this case.

1. Order of Limited Discovery: As you are aware from our previous updates, in February 2013, the Court through the Magistrate Judge had ordered the US Government to provide discovery to Plaintiffs including disclosure of documents and information on a limited basis while a second Motion to Dismiss was outstanding. Since that time, the Government has repeatedly argued about the quantity and nature of the information they are prepared to give us, which has required us to go back to the court several times, for both hearings upon filing a number of motions and responses.
2. Discovery Orders and Multiple Hearings on Discovery: As you can see from the attached documents, KLS has participated in and requested several hearings in order to obtain the discovery initially ordered by the magistrate judge. Each of the times we have gone back to Court, we have been successful in persuading the Judge to allow discovery to proceed - despite the Government's repeated objections.
3. Stay of Proceedings: Only a few days ago, and amidst our progress to date, the District Court Judge in the case has just handed down an order staying all proceedings as he prepares to provide a ruling on the second motion to dismiss.

We will advise all clients as soon as this happens, but in the meantime, please do not hesitate to contact us if you have any questions.

The KLS Stanford Team. .


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

Kachroo Legal Services Update

STANFORD UPDATE

June 2013

Dear Stanford Clients:

Potential Unauthorized Claims Made By Attorneys On Behalf of Investors

We have received multiple reports from clients that certain named attorneys have lodged claims with the receiver, purportedly on behalf of clients. These investors, however, have not authorized the attorneys in question to do so - and in some cases have never even heard of them.

If you believe that a claim has been lodged on your behalf without your authorization or knowledge, please get in touch as soon as possible and we can assist you in rectifying the situation and advise you on your rights.

Zelaya vs. United States of America

On May 13, 2013, a telephonic hearing occurred regarding the scope of the deposition that Plaintiffs are entitled to take of the SEC through its designated representatives.  The United States objected to all of the subject areas that the Plaintiffs sought to cover at the deposition and further objected to providing any documents in response to the document request that accompanied Plaintiffs' notice of deposition of the SEC.  Plaintiffs responded, arguing that the Magistrate Judge authorized Plaintiffs to pursue those subject areas and also to serve the United States with a focused document request.  After briefing and oral argument, the Magistrate Judge overruled most of the United States' objections and ruled that the Government must proceed with the deposition and provide Plaintiffs with the information requested in their related document request.  

This ruling in our favor enables us to continue our vigorous efforts to expose the negligent acts of the SEC and brings us one step closer to obtaining the information necessary to proving our case.

NAFTA and Other Bilateral Trade Agreement Arbitrations

We have recently become aware of potential new action being pursued by Peter Morgenstern and (separately) Todd Weiler, Edward Snyder and Edward Valdespino on behalf of various investors.  These investors have filed a notice of intention to submit a private arbitration against the United States under the arbitration provisions of the various treaties.  We are confident, however, that the current action in front of the Federal District Court in Florida against the SEC is preferable for investors for a number of important reasons:

1)      NAFTA and other similar agreements ensure that foreign investors are not treated unfavorably compared to domestic US investors. While many of the investors in the Stanford entities were indeed foreign, all of the evidence shows that that they were treated equally as badly as US investors;

2)      The treaties seek to ensure that the treatment of foreign investors does not fall below a minimum acceptable standard, as defined in international law.  In order to prove that it has, investors pursuing arbitration will have to establish essentially the same facts we have alleged in our Federal Court case. The difference between the proposed arbitration and our court case, however, is that we can rely on the strong discovery mechanisms to force the Government to disclose relevant information, whereas arbitration has much weaker and more limited powers.

3)      It appears that participation in this arbitration by Mexican investors may result in their inability to participate in our SEC class action.  Please note that there are subsequently three key issues to keep in mind if you are considering joining the arbitration: (1) the timeline and pressure being imposed on investors to make this decision appears unfair; (2) as far as we know, such an arbitration has never previously been taken and therefore no precedent exists for it; and (3) as far as your SEC action is concerned, you may be precluded from participating in the class action and may be considered an opting out of the class action in which you have already invested time, money and resources.

Our action has already overcome the key initial hurdle and has a defined path towards a successful verdict.  We know from our case that, in order to overcome the Government's position on these claims, extensive discovery is necessary.  We do not believe that the procedural intricacies of a NAFTA international arbitration, including the limited means of discovery, provide the best avenue for recovery against the Government.  We believe the risk of being disqualified from participating in our SEC action far outweighs the potential for obtaining a successful judgment against the Government in the NAFTA international arbitration. 

The Investor Committee 

We have learned that significant changes to the Investor Committee composition have been occurring over the course of the past few months.  KLS will take this matter into serious consideration moving forward in its full representation of investor claims before the Dallas Receiver.

-          The KLS Stanford Team 

Visit the Stanford International Victims Group - SIVG official forum http://sivg.org.ag/

KLS Stanford Update March 2013

Stanford Update March 2013 

 Dear Stanford Clients: This update will summarize recent events in the Stanford matters over the past several weeks.

 SEC Litigation 

 In our last update, we notified you that the magistrate judge in our SEC class action denied the Government's request to stay all discovery. We are summarizing here the outcome of the discovery hearing which was held in Miami on February 14, 2013. One of the key hurdles to overcome in an action against the Government is the discretionary function exception. The magistrate made clear that this hurdle has been overcome and the court had already ruled on the sovereign immunity issue. The magistrate also held that "it is not obvious that [the Government's second motion to dismiss] will succeed." A copy of this ruling is attached for your review. Following this ruling, we have moved forward with discovery and we continue to wait for the district court to rule on the Government's second motion to dismiss.

 In view of the delays caused by the Government's motion to stay discovery, we requested that the Court push back certain pre-trial and trial deadlines to allow us adequate time to pursue the discovery required to prove our case. We are happy to report that the Court granted our request and pushed back discovery deadlines to afford us this opportunity, which also resulted in a new trial date set for April 7, 2014.

 Potential NAFTA Action

 We have also recently become aware of a potential new action being pursued by Peter Morgenstern on behalf of Mexican investors. Apparently, Mr. Morgenstern intends on filing a private arbitration against the United States under the arbitration provisions of NAFTA. It appears that participation in this arbitration by Mexican investors may result in your inability to participate in our SEC class action. Please note that there are three key issues to keep in mind as you consider joining this litigation: (1) the timeline and pressure being imposed on investors to make this decision appears unfair; (2) as far as we know, such an action has never previously been taken and therefore no precedent exists for it; and (3) as far as your SEC action is concerned, you may be precluded from participating in the class action and may be considered an opting out of the class action in which you have already invested time, money and resources.

 First, we do not know of any successful action against the United States for failure to provide fair and equitable treatment to foreign investors under circumstances similar to the Stanford Ponzi scheme. This is an untested and speculative theory for recovery which could disqualify you from participating in our action. Our action has already overcome the key initial hurdle and has a defined path towards a successful verdict. Moreover, discovery in arbitration is far more limited than discovery in our pending action. We know from our case that, in order to overcome the Government's position on these claims, extensive discovery is necessary. We do not believe that the procedural intricacies of a NAFTA international arbitration, including the limited means of discovery, provide the best avenue for recovery against the Government. We believe the risk of being disqualified from participating in our SEC action outweighs the potential for obtaining a successful judgment against the Government in the NAFTA international arbitration.

 Claims 

 In the meantime, we have been working with many of our clients who have received determination notices from the Stanford Receiver regarding the claim amount. We have assisted our clients in objecting to those determinations if they were less than the total claimed amount, and we will continue to assist any and all clients who would like us to review their claims determination and provide advice. Should you have any questions, please do not hesitate to contact us.

For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum

KLS Update February 2013

Dear Stanford Clients:

This update is in response to the questions and concerns of many of our clients regarding the
Receiver’s proposed interim distribution, as well as several other matters.

The Receiver’s Proposed Distribution

You may have received a notice indicating that you must complete a certification form within six weeks. However, the six week time period does not begin until after the Court approves the Receiver’s request to make an interim distribution. As soon as the Court approves the request, then you will have six weeks to complete the certification form. For many of you, we will be completing these requirements on your behalf. We do not anticipate the Court approving the request for several months. Several objections have been filed in opposition to the distribution, and there may be more objections filed within the next few weeks. These objections were filed by various parties, mostly defendants in lawsuits brought by the Receiver, claiming that they should be included in the distribution. It will take several weeks, if not months, for the Court to resolve these objections. We will keep you updated on this process and notify you as soon as the Court enters a ruling on the proposed distribution plan.

The February 14, 2013 Discovery Hearing in the SEC Class Action

We continue to vigorously prosecute the case against the Government for the SEC’s failure to take enforcement action against the Ponzi scheme. As we mentioned in past updates, the Government filed a second motion to dismiss the Complaint, raising new arguments that it had not previously raised. We filed a strong opposition to the motion, and the issues are now fully briefed and awaiting a ruling from the Court. We have also been moving forward with discovery and we filed a motion to compel the Government to disclose more information. The Government filed a motion seeking a stay on discovery until after the Court rules on the motion to dismiss.


The Court set a hearing on these motions on February 14, and we traveled to Miami, Florida last week to attend and argue at the hearing.

We are happy to report that the Court denied the Government’s motion to stay discovery. The Court ruled that the Government will have to begin responding to discovery in this case and cannot completely obstruct the process by staying discovery altogether. The Court also ruled on our motion to compel discovery by compelling the Government to produce certain preliminary information and requiring the Government to produce a witness to testify at a deposition regarding the allegations of our Complaint. We look forward to taking this deposition and will continue to update you regarding the status of this case.

The Antiguan Claim Process

As our SFA clients know, the Antiguan Liquidator set up a claim process and we submitted claims to the Liquidator on behalf of all of our SFA clients. At the time we submitted those claims, the Liquidator had not yet set up a deadline for submission of the claims. However, now the Liquidator has set a March 31, 2013 deadline. We encourage our non-SFA clients to review the procedure for submitting claims and make sure you submit your claims before the deadline. If any of you want to become SFA clients so that we can complete the process on your behalf, please do not hesitate to contact us. More information about the claims’ process requirements can be found at:

http://www.sibliquidation.com/claims-administration/

As always, if you have any questions or comments, please feel free to contact us.

For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/ 

The Stanford International Victims Group Forum

Kachroo Legal Services Stanford Update January 2013

Stanford Update January 2013

  Dear Stanford Clients: This letter will update you on the recent activity in the Zelaya case. As you may recall, at the time of our last update, we had drafted and served a variety of discovery requests (that is, requests for information from the Government) regarding the SEC's knowledge of the Stanford Ponzi scheme and other requests directed towards proving our claims. We anticipated receiving responses to those requests and then determining whether those responses were adequate or whether we needed to request that the Court compel better responses from the Government.

After receiving and reviewing the Government's responses to our discovery, we determined that the responses were plainly inadequate and incomplete. We attempted to negotiate with the Government to resolve some of its objections to our requests, but the Government was unwilling to withdraw many of its objections. Although we are continuing to negotiate a resolution to the discovery dispute, we have also filed a motion to compel with the Court requesting that the Court compel better discovery responses from the Government.

The Government also recently filed a second motion to dismiss our complaint. Although generally a defendant can only file one motion to dismiss, there are a few limited jurisdictional grounds that can be raised at any time to dismiss a complaint. The Government has raised arguments that the Court does not have jurisdiction to hear the case because the Federal Tort Claims Act contains certain exceptions that apply in this case. For a more detailed explanation of the Government's arguments, we are attaching the motion to dismiss to this update. We are currently preparing a response to the motion, and we are confident that the Court will again deny the Government's attempts to dismiss the case.

In the meantime, the Government has also filed a motion to stay all discovery while its motion to dismiss is pending. The Government argues that it should not have to engage in discovery while a motion is pending that could result in a dismissal of the case altogether. We are currently working on a response to this motion, and we believe the Government's argument to stay discovery is without merit. We believe our pending motion to compel discovery, coupled with the Government's pending motion to stay discovery, perfectly contrasts the two sides in this case. We are pushing forward on all cylinders, and the Government is resisting at every turn.

 For your review, attached are copies of our motion to compel discovery, the Government's second motion to dismiss, and the Government's motion to stay discovery.

 Attachments:
 Plaintiffs Motion to Compel
US Motion to Dismiss Amended Complaint
 Zelaya v. USA -USA Motion to Stay Discovery  

For more information and discussions visit Stanford International Victims Group Forum

New Forum Announcement for Stanford International Victims Group

Stanford International Victims Group are pleased to announce the creation of a new forum which can be found at:

http://sivg.org.ag/

KLS Amended Scheduling order Against the SEC

Amended Scheduling Order

Statement from Kachroo Legal Services

We are preparing another update specifically addressing the status of our lawsuit against the government and all the work we have conducted after the Court denied the government’s motion to dismiss. However, to clarify, the Court’s order was an initial ruling that allowed our lawsuit to go forward into the next stage, which is where we attempt to prove our claims against the government. It was a groundbreaking ruling because all other lawsuits were dismissed immediately upon filing and were not allowed to go forward. We are now in the next stage of the litigation where we seek documents from the other side in order to prove our claims. Our update will address the status of this stage of the litigation. If you have any other questions, please feel free to contact me directly. I am happy to speak with you via email or we can discuss over the phone. You can reach me (212) 372-8939.

The Court’s order was an initial ruling that allowed our lawsuit to go forward into the next stage, which is where we attempt to prove our claims against the government. It was a groundbreaking ruling because all other lawsuits were dismissed immediately upon filing and were not allowed to go forward. We are now in the next stage of the litigation where we seek documents from the other side in order to prove our claims.

And how long does that procedure may take

The deadline to complete this stage of the litigation (called “discovery”) is March 1, 2013. There are a few other stages of the litigation after discovery, during which each side will argue that a judgment should be entered in their favor and the case should not proceed to a trial. If the court disagrees with both sides, then it will go to a full trial. The trial date is now set for October 21, 2013.

Allen Stanford: From Billionaire to Inmate

By Jeanine Ibrahim | CNBC
The case of Allen Stanford, a former billionaire who once allegedly sealed a deal with blood and is currently serving a 110-year federal prison sentence, could soon be back in the headlines. A federal judge ruled last month that investors could proceed with a lawsuit that alleges the Securities and Exchange Commission (SEC) was negligent in its handling of the fraud.

 Texas-born Robert Allen Stanford exuded wealth. At his height in 2008, he was one of the richest men in America, listed on the Forbes 400, and worth an estimated $2.2 billion.

He defined conspicuous consumption. In one three year period alone, he spent $100 million on aircraft, which included helicopters and private Lear Jets. He even spent $12 million lengthening his yacht by just 6 feet.
As it happened, however, Stanford indulged in these perks with ill-gotten gains. In early 2009, the scale and scope of Stanford's extravagances finally caught up to him.
Stanford was eventually convicted of selling fraudulent certificates of deposit from his offshore bank on the island of Antigua in an international $7 billion Ponzi scheme, a case that drew comparisons to disgraced broker Bernie Madoff's multibillion dollar fraud. To date, none of the more than 20,000 investors he bilked have recovered any money.
In their lawsuit, the investors claim that on four instances and as early as 1997, the SEC determined that Stanford was running a Ponzi scheme. Still, the agency did not act accordingly and failed to notify the Securities Investor Protection Corporation. Investigators did not bring charges against Stanford until 2009, in the wake of the global financial crisis.

The government moved to dismiss the case, but U.S. District Judge Robert Scola rejected the motion. He ruled that if the SEC knew Stanford was running a Ponzi scheme as alleged by plaintiffs, the agency was obligated to report it. Scola added that the government could argue that it did not know Stanford was running a fraud if and when the case moved to summary judgment.
SEC spokesman John Nester declined to comment to "American Greed." Nonetheless, the attorney for the investors, Gaytri Kachroo, said the ruling was significant. "It truly provides the investing public a precedent and therefore the hope that a case against the SEC can succeed if meritorious under the law," the lawyer said.

 A Conman's Bogus Empire of Epic Proportions
Beyond fancy toys, Stanford bought a small island for $63 million. He owned mansions in Houston, Antigua, and St. Croix. And in Coral Gables, Fla. an enormous 18,000 square foot castle. It was fit for a king: the property included 57 rooms, a tower and a moat. Yet after just one year of living there, he grew tired of the sprawling estate - moving out and having it demolished.

He also loved the game of cricket. By 2008, he was considered the world's number one promoter of the sport, even offering up a $20 million cash prize, the largest ever for a team sporting event, for a match in London.

Yet according to the U.S. Attorney's office, Stanford was not playing with honest money. He got it by siphoning off loans to himself, approximately $2.2 billion from depositor's CD holdings, without ever revealing these loans to investors.

From Brash Texan to Big Money Banker
Stanford grew up in a small town 90 miles south of Dallas. Much like his home-state, everything about the man was Texas-sized.

Doug Birdsong, who used to workout with Stanford, recalled him as a muscular man, standing 6'5" and weighing about 330 pounds. "He was the biggest, he was the best, and he was the boss," Birdsong told "American Greed."

His early business ventures ended in failure. After losing a string of health clubs to bankruptcy in 1982 and racking up $13 million in personal debt, Stanford took a few more stabs at entrepreneurship before heading to the Caribbean, where he first entered banking.
He founded "Stanford International Bank" in 1991 on Antigua. It was there that he laid the foundation of his empire, becoming the island's largest employer.
He targeted wealthy Latin Americans worried about the stability of their governments, and it worked. Within three years, the bank's assets skyrocketed to $350 million.

One year later, he moved into the U.S. market, establishing Stanford Financial Group in Houston. The company became known for selling certificate of deposits (CDs). Synonymous with safety, CDs seemed like a smart choice for potential buyers. As Stanford's investors piled into these instruments, in less than a decade the group grew to $3 billion.

Unwitting investors, however, had no idea that Stanford's CDs were anything but safe.

A Scam from the Start

Yet suspicions rose in 2005 when SEC investigators began taking a hard look at Stanford Financial Group, specifically his Certificates of Deposit from Antigua. Three years later, when two whistleblowers came forward, the agency was handed hard proof of Stanford's fraud.
Assistant U.S. Attorney Paul Pelletier got the case from the SEC. He landed a huge break when Jim Davis - Stanford's right-hand man since the 1980's and the company's chief financial officer - agreed to talk in exchange for a reduced sentence.
Davis confessed that from his first day on the job, the company simply made up numbers and cooked the books. "That's what his job was as CFO, and he continued to do that from 1987 or '88 all the way until 2009," Pelletier said.

When they first started the business, Davis said Stanford could do whatever he wanted on Antigua. He had the island's chief banking regulator in his back pocket. In a bizarre twist, the two even sealed a bribery scheme deal by becoming "blood brothers," cutting their fingers to mix their blood, according to Davis.

A decade-and-a-half after Stanford Financial Group first opened its Houston headquarters, the SEC shut its U.S. operations down. In June 2009, Stanford was mired in charges of fraud, conspiracy to launder money and conspiracy to obstruct justice.

Throughout his trial, however, the former high-flying billionaire steadfastly maintained his innocence. He attempted to put the blame on Davis, but a jury did not buy his story. This March, he was found guilty on 13 counts, and later sentenced to more than a century in prison.

Investors Devastated by Economic Homicide
Many of the investors at the sentencing were satisfied, with Sandra Dorrell being one of them.
In 2005, after selling off an office furniture business, she invested her money in the Stanford Group's CDs. A single mother who was battling a rare, life-threatening condition called Caroli's disease, she had planned to use her investment to give her peace of mind and financial security as she endured medical treatment.
Instead, she lost every penny.
"To lose $1.3 million to someone that absolutely stole the money from me is just horrific," Dorrell told CNBC's "American Greed."
Fellow investor Cassie Wilkinson, who along with her husband lost six-figures to Stanford's treachery, agreed.
"The sentencing for crimes like this has become so big and so long that they're comparing it to economic homicide, and really, that's what it is," she said. "Someone murdered the life that I knew, that I worked hard for. We were not born with money; we earned every single penny," Wilkinson added.
For 62-year-old Stanford, a projected release date of 2105 is a life sentence -one that he deserves, according to many of his victims.

KLS has requested that we post the following on the blog for your information

“KLS continues to file administrative claims against the SEC on behalf of Stanford victims in order to have such investors included in the Stanford class action against the SEC. KLS on your behalf will likely face challenges to your inclusion in the class of litigants represented on the basis of the timeliness of your claim. However, KLS believes there are strong arguments to support later filings of such SEC claims. If you have filed a claim with a different attorney and need to file an amended claim or if you have never filed a claim with the SEC, please contact KLS immediately at the following address: info@kachroolegal.com”

A TIMELY CALL FOR HARMONY AMONG VICTIMS AND THEIR ATTORNEYS

Dear Stanford Investors and Attorneys of Stanford Investors:

We at KLS, and the managers of this blog "Stanford's Forgotten Victims", are very pleased that we have been able to overcome the sovereign immunity hurdle, and the U.S. Government’s motion to dismiss in this case.

We recognize, however, that this is an opportunity not only for KLS and its clients but for all investors who have filed, or attempted to file claims with the SEC. As you know, we have filed our case as a class action. As such any victory we obtain is a victory for all class members (all those who have filed claims with the SEC).

Along with KLS, there were many other attorneys who did attempt to file claims with the SEC on behalf of their clients. Regardless of the rancor that may have existed between attorneys and investors in the past, now is not the time to dwell on conflict, but to breed the kind of bond that can assist this case in going forward with the kind of strength we want to engender, with seriousness, collegiality, fairness, and propriety as our guide.

Investor recovery should be first and foremost for all investors and all attorneys of investors. As such, we would like to encourage all investors (who have filed with the SEC in any manner whatsoever) or their attorneys who have done so, to contact us so that we can determine a common strategy forward to benefit all investors.

We thank you all for your support, and your criticism. After all, we believe, all the feedback we have received has assisted us, and culminated in the formulation of our initial victory in this case!

Best wishes,
Gaytri Kachroo


 
Dr. Gaytri D. Kachroo
PRINCIPAL
KLS-Kachroo Legal Services, P.C.
225R Concord Ave.
Cambridge, MA 02138
Direct: 1-617-864-0755
Facsimile: 1-617-864-1125
http://www.kachroolegal.com

Stanford Victims in Antigua Praise Latest Development

Source: Caribarena

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).

KLS - Stanford Update #17

HISTORIC VICTORY FOR STANFORD VICTIMS IN ZELAYA v. UNITED STATES

Miami, Florida - September 7, 2012

Federal District Court Judge Robert N. Scola, Jr. handed down an historic opinion against the U.S. Government today, holding the Securities and Exchange Commission potentially liable for billions of dollars for not notifying the Securities Investor Protection Corporation when it had information about Allen Stanford’s Ponzi scheme. In the wake of the Madoff and Stanford Ponzi schemes and the dozens of lawsuits filed against the Government for the SEC’s failure to protect the public, today marks the first time that a lawsuit survived the Government’s motion to dismiss.

The case is being fought by Dr. Gaytri Kachroo and her law firm, Kachroo Legal Services, P.C., on behalf of thousands of Stanford victims. KLS filed a class action against the government, alleging that the SEC knew Stanford was operating a multi-billion dollar Ponzi scheme and “sat and watched the scheme grow for years, as it ballooned into a $7 billion enterprise, second only to Bernard Madoff as the largest Ponzi scheme in history.”

In an unprecedented decision denying the Government’s efforts to dismiss the lawsuit, the Court held today that the SEC can be held liable for failing to act appropriately when put on notice that an investment advisor is operating a Ponzi scheme. To achieve this important and unprecedented goal on behalf of its clients, KLS crafted an argument not raised in any of the prior complaints against the government: that the SEC violated a statutory duty to notify SIPC that an investment advisor was in or approaching financial difficulty.

Dr. Gaytri Kachroo is proud of her firm’s achievement: “This decision reaffirms the SEC’s fundamental mission. For decades, the SEC has relied on sovereign immunity to avoid the consequences of its inaction in the face of Ponzi schemes. The ruling handed down today is a bold statement and a warning to the Government: If you fail to carry out your statutory obligations to protect the public against wrong doing with massive repercussions to the investing public, you will be held liable.”

Victims of the Stanford Ponzi scheme have not only lost billions of dollars as a result of the SEC’s failure to put an end to the scheme, but they have also lost hope that they will see any recovery, as the SEC- appointed receiver has recovered only pennies on the dollar at this point, and has not made any distribution to victims. “We are in an unprecedented position, and are thrilled to succeed in this first major hurdle in the case. Today, our small firm accomplished what thousands of lawyers and consultants employed by the Receiver could not do in over three years: restore hope for the victims of Stanford’s Ponzi scheme.”

Kachroo Legal Services represents individuals and corporate entities in business and securities litigation, companies and their Boards in ethics and audit compliance, funds and investors in their government and SEC relations, and in general corporate law and general counsel services for companies both domestic and international. Dr. Gaytri Kachroo is the attorney for Madoff whistleblower Harry Markopolos.

Lawsuit against U.S. over Stanford Ponzi scheme can go ahead

Source:Joseph Ax (Reuters)

(Reuters) - A lawsuit claiming U.S. securities regulators were negligent in failing to respond earlier to Allen Stanford's $7 billion Ponzi scheme can go forward for now, a federal judge ruled in Florida on Friday.

U.S. District Judge Robert Scola rejected the U.S. government's motion to dismiss the case, according to court documents. The government claimed the court did not have jurisdiction over the U.S. Securities and Exchange Commission's handling of the Stanford case.

The purported class action complaint, filed by two investors who say they lost a combined $1.65 million when the scheme collapsed, claims the SEC knew as early as 1997 that Stanford was likely operating a Ponzi scheme but took no action against him until 2009. The SEC had a duty to notify the Securities Investor Protection Corp (SIPC) of Stanford's fraud, the lawsuit asserts.

The SIPC, funded by the brokerage industry, handles investors' claims when brokers fail and has overseen liquidation proceedings for Bernard Madoff's Ponzi scheme and the collapse of MF Global.

In his ruling, Scola found that the SEC was required to act if it concluded that Stanford was running a Ponzi scheme.

"When the Securities and Exchange Commission believes that a broker or dealer is in or approaching financial difficulty then it must report that broker/dealer to the Securities Investor Protection Corporation," he wrote.

Scola did, however, dismiss the lawsuit's second claim, which faulted the SEC for not considering whether to deny Stanford's company's annual registration as an investment advisor. The judge agreed with the government's argument that such decisions are entirely within the SEC's discretion.

The government's argument that the SEC did not know Stanford was running a Ponzi scheme will be addressed if and when it moves for summary judgment, the judge said.

A similar $18.7 million lawsuit against the U.S. was tossed by a Texas federal judge last year for lack of jurisdiction.

In a March 2010 report, the SEC's inspector general found the SEC was aware since 1997 that Stanford was likely running a Ponzi scheme and that numerous agencies, including the Federal Bureau of Investigation, the Justice Department and the Secret Service, all probed Stanford's operations at one time or another.

An SEC spokeswoman declined to comment on Friday's ruling.

"This is a historic ruling showing that the SEC can finally be held accountable for not notifying SIPC," said Gaytri Kachroo, a lawyer for the plaintiffs.

Stanford was sentenced in June to 110 years in prison for bilking investors with fraudulent CDs issued by Stanford International Bank, his bank in Antigua.

The plaintiffs are seeking unspecified damages and certification of the class action.

The case is Zelaya et al. v. United States, U.S. District Court for the Southern District of Florida, No. 11-62644.

(Reporting by Joseph Ax; editing by Carol Bishopric)

KLS Beats the SEC Motion to Dismiss!!!!

FANTATIC NEWS FOR ALL VICTIMS GAYTRI KACHROO HAS BEAT THE SEC MOTION TO DISMISS HER CASE....WE ARE TAKING THE SEC TO COURT!

Zelaya Order MTD

KACHROO LEGAL SERVICES, P.C. UPDATE

KACHROO LEGAL SERVICES, P.C. 
Stanford Update: July 2012

Dear Stanford Clients: We here at KLS continue our efforts every day to maximize your recovery and hold responsible parties liable for the Stanford Ponzi scheme. We remain confident and focused on the efforts we are taking to obtain a real recovery for Stanford victims. This letter will update you on the status of the various actions we are taking.  

The SEC Lawsuit
In our lawsuit against the SEC, we are waiting on a ruling from the judge on the SEC’s motion to dismiss the case. This is the same status as our last update, and we again will let you know as soon as we have a ruling on the motion. In the meantime, the parties have exchanged initial disclosures identifying various individuals likely to have relevant information about the case. We are also preparing discovery requests to serve on the SEC, including document requests and interrogatories, seeking all available information regarding their investigations of the Stanford entities and their failure to take enforcement action to end the Ponzi scheme. We expect the SEC will oppose responding to any discovery prior to the Court’s ruling on the motion to dismiss, and we may have to file a motion requesting that the Court compel their discovery responses. We will continue to keep you updated on the status of this litigation. Please note that we continue to file claims with the SEC to include as many of you who wish to be included in the class supporting and represented by this lawsuit. Please do not hesitate to contact us individually if you have not yet filed an administrative claim with the SEC through KLS and want to be included.  

The Claims Process
Currently, both the Antiguan Liquidator and the Dallas Receiver have initiated a claims process. There is no coordination between the two processes, and we must file claims in both jurisdictions. For our Stanford Further Actions clients, we have been diligently preparing and filing your claims. You will receive a full copy of your finalized claim when it is filed. We have communicated with a number of you on these claims and will continue to reach out to you in order to finalize your claims. If you have any questions about the claims process, please feel free to contact us.

IF YOU HAVE NOT SIGNED UP FOR OUR STANFORD FURTHER ACTIONS PROGRAM AND PAID THE REQUIRED FEES, PLEASE BE ADVISED THAT WE WILL NOT BE FILING ANY CLAIMS ON YOUR BEHALF AND IT IS YOUR RESPONSIBILITY TO FILE YOUR CLAIMS.  

The Dallas Receivership
The Receiver in Dallas continues to cost the Stanford victims millions of dollars in fees and expenses as his team of attorneys and consultants operate the receivership estate. There are very few assets left for the Receiver to liquidate, and he appears to be focusing solely on his various clawback and fraudulent transfer cases. The Receiver should be able to reach settlements in these actions. However, based on his actions to date, we have very little confidence in him and the team of attorneys he has working for him. We believe the Receiver and his attorneys and consultants value recovering their own fees above any recovery for the victims. We have complained about this to the Court and the Receiver on multiple occasions. We are currently conducting a comprehensive review of all actions taken by the Receiver to determine whether the Receiver should be disgorged of the profits he and his staff earned over the past several years while bringing very little net benefit to the estate.  

Other Potential Lawsuits
We believe there may be potential lawsuits to bring against various banks and financial institutions through which Stanford may have laundered funds. These banks may be liable if they assisted the Stanford Ponzi scheme, whether knowingly or not. In the next few weeks, we will schedule a conference call to discuss these potential actions with you. In particular, we are considering pursuing a case against the Toronto-Dominion Bank based on investor requests. We would like to schedule a call with all of those interested in pursuing such a lawsuit later next week and will send around the call in information and date to those interested in supporting such action on our part.  

Negotiations with Funds to Sell Claims
We have spent several months negotiating with certain hedge funds regarding the potential sale of your claims to a fund for a discounted price. However, prices offered by these funds are a fraction of the price (in the single digits when we believe that a plausible price is 1/3 of the claim amounts or close to that amount) we believe the claims are worth, and we do not believe it is in the best interests of our clients to sell their claims at this price. We believe these funds are playing hardball. We would be happy to sell your claims at the price currently offered, but we do not recommend selling your claims at this price. The negotiations are at a standstill at this point.  

SIPC Coverage
As you may have recently heard, in the lawsuit brought by the SEC against SIPC to compel SIPC coverage, the Court ruled that SIPC cannot be compelled to act. We assume the SEC will appeal this ruling, but for the time being, the prospect of SIPC coverage is dim. It is unfortunate that the Stanford Victims Coalition expended so much time and money on pursuing this.  

Stanford Criminal Conviction
The recent criminal conviction of Allen Stanford should help the government’s claim to recover the $300 million in assets frozen overseas. Currently, the United States and Antiguan governments are fighting for recovery of these funds. We are hopeful that, whichever government prevails, these funds available for distribution. If you have any questions or comments, please contact us.

 Best wishes,

 The KLS Stanford Team.