Plaintiffs Claim Regulators Ignored Warnings of Fraud
By BILL LODGE
Advocate Staff Writer
Some of the investors alleged to have been defrauded by Texas
promoter Robert Allen Stanford say they will use a
Massachusetts lawyer to sue the federal government for
alleged failure to take timely regulatory action against him.
I believe we’re going to join this lawsuit,” said Baton Rouge
real estate investor Jason S. Graham, 39.
Graham is one of more than 1,000 residents of the Baton
Rouge, Lafayette and Covington areas who lost an estimated
combined total of more than $1 billion to Stanford’s
operations. Those estimates are by state Rep. Bodi White, RCentral,
and Baton Rouge attorney Phillip W. Preis.
We’ve waited for the last two years for our Congress people
and senators to help us,” said Graham. “It’s an absolute joke.
”
Graham already is a plaintiff in a civil lawsuit against the
people who marketed Stanford’s worthless certificates of
deposit and other investment vehicles in Louisiana.
That lawsuit and similar actions across the country, however,
were suspended more than a year ago on orders from a Dallas
federal judge.
U.S. District Judge David Godbey ruled that those lawsuits
would interfere with a court-appointed receiver’s efforts to
track down the remnants of Stanford’s assets.
But attorney Gaytri Kachroo, of Cambridge, Mass., filed a
class-action suit against the federal government in November
for alleged failure by the Securities and Exchange Commission
to protect people’s savings from New Yorker Bernard Madoff’s
admitted Ponzi scheme.
A Ponzi is an illegal investment scheme that involves few, if
any, actual investments. Early investors are paid dividends
described by Ponzi operators as profits. The money actually
comes from later investors.
The scheme collapses when promoters can no longer coax
money from newly targeted victims.
Madoff is serving a 150-year term in federal prison for bilking
billions of dollars from pension funds, mutual funds and indidual investors.
The scheme collapses when promoters can no longer coax money from newly targeted victims.
Madoff is serving 150-year term in federal prison for bilking billions of dollars from pension funds, mutual funds and individual investors.
Kachroo said she now is filing administrative law claims with
the SEC in the Stanford case in order to preserve the rights of
people in Louisiana and other states to file a class-action suit
against the commission after the Feb. 16 filing deadline. That
date will mark the second anniversary of the SEC’s action to
shut down Stanford’s worldwide operations.
In such cases, plaintiffs cannot sue the federal government
until after a federal agency has denied investors’ claims,
Kachroo said.
Kachroo said last week that she has filed with the SEC claims
by 30 Stanford investors. Another 270 claims were being
processed by her staff, she said.
SEC lawyers in Dallas and federal prosecutors in Houston
allege in court filings that Stanford operated a Ponzi scheme
that harvested at least $7.2 billion from more than 25,000
people from Baton Rouge to Bogota, from Venezuela to
Europe.
Stanford, 60, remains in federal custody in Houston, where he
faces federal fraud charges.
James M. Davis, a Baldwyn, Miss., resident who served as
Stanford’s chief financial officer, has pleaded guilty to felony
charges and admitted that Stanford’s operations were a huge
Ponzi from the beginning.
Whistleblowers ignored?
For nearly nine years before Madoff admitted that his
investment empire was a giant Ponzi, financial analyst and
certified fraud examiner Harry Markopolos had warned the
SEC that the man was a criminal.
Kachroo represented Markopolos when he testified Feb. 4,
2009, before the U.S. House of Representatives’ Committee on
Financial Services.
“Every tool, every resource, and every person (in the SEC) has
to be brought to bear in the fight against white-collar crime,”
Markopolos testified. “Government has coddled, accepted and
ignored white-collar crime for too long.
”
Markopolos added: “It is time the nation woke up and
recognized that it’s not the armed robbers or drug dealers who
cause us the most economic harm.
“It’s the white-collar criminals living in the most expensive
homes and who have the most impressive resumes who harm
us the most,” Markopolos told members of Congress. “They
steal our pensions, bankrupt our companies and destroy
thousands of jobs, ruining countless lives.
”
Last year, SEC Inspector General David Kotz reported that
commission officials repeatedly failed to pursue whistleblower
allegations between 1997 and 2005 that Stanford was
defrauding his investors. During that same time, Kotz
reported, examiners in the SEC’s Fort Worth office called for
investigation of Stanford at least three times.
In Baton Rouge, Preis continues to pursue a civil lawsuit on
behalf of Stanford investors against the state Office of
Financial Institutions. That suit alleges that OFI officials failed
investors by ignoring warning signs that Stanford’s operations
were fraudulent.
Preis said last week he believes that suit has a chance of
success, but he asserted that Kachroo has picked too big a rival
in the Stanford and Madoff litigation.
“We don’t think the idea of pursuing a suit against the SEC has
much merit to it,” Preis said. “The chances of ever collecting
from the United States government are slim to none.
”
Katchroo said she believes ordinary people can fight City Hall
and even collect damages from the federal government in the
Stanford and Madoff tragedies.
We believe we have a fairly good chance in both cases,”
Kachroo said.
The SEC won’t talk about Kachroo’s efforts in either case.
“
"Decline comment on both,"” e-mailed SEC spokesman John J.Nester.
Stanford was scheduled for trial on his criminal charges this
month. But a federal judge in Houston postponed that trial
indefinitely after being informed that Stanford has become
addicted to painkillers while in federal custody.
Showing posts with label defrauded. Show all posts
Showing posts with label defrauded. Show all posts
Wednesday, 26 January 2011
Wednesday, 15 December 2010
Kachroo Legal Services - Statement To The Stanford Investors
Investors defrauded by the Stanford Ponzi Scheme
We recommend that all Stanford investors file a U.S. Securities and Exchange Commission (SEC) administrative claim under the Federal Tort Claims Act (FTCA) through Kachroo Legal Services, P.C. (KLS) as soon as possible and no later than February 16, 2011. Due to the statute of limitations KLS will prepare to file the class action suit within six (6) months after that date. It is recommended that investors submit their information to KLS well before this deadline to ensure their claims are timely processed. KLS will file a class action lawsuit against the SEC (similar to a normal class action but in this instance only for those investors for whom KLS has filed an SEC administrative claim). Only those clients who have filed an SEC administrative claim under the FTCA will be represented in the KLS class action. All investors would be represented by our class action, both domestic U.S. investors and international investors around the world affected by the SEC’s actions and omissions.
We anticipate filing thousands of claims (as there are over 20,000 investors into the Stanford Ponzi Scheme), so to ensure your claim is handled promptly, you should file as soon as possible.
We will help you by processing and filing your FTCA claim with the SEC. In addition, KLS will file a lawsuit against the SEC on behalf of everyone who has filed FTCA claims by the deadline.
All investors must sign the KLS engagement letter attached herewith in English or in Spanish. The cost for both the SEC administrative claim work and the lawsuit will be as follows per investor:
For investors who have invested less than $100,000 USD total through all their accounts - $500;
For investors who have invested between $100,000 USD and $1million USD - $1000;
For investors who have invested more than $1million USD through all their accounts - $1500.
This will be the only cost per investor for all such legal services other than a contingency fee of $15% of the recovery obtained by KLS as well as reasonable costs and expenses of the litigation.
Why Choose KLS?
1. Dr. Kachroo, Principal of KLS, is also Vice-Chairman of the Global Alliance, a civil society whose members hip consists of 5000 attorneys from around the world.
2. KLS has experience working closely with the SEC and their offices. We are currently in discussions with the SEC to establish the Madoff Task Force and develop an alternative dispute resolution mechanism to settle cases against implicated financial institutions.
3. As a part of the Markopolos team, Dr. Kachroo represented the whistleblower that first discovered the Madoff fraud and exposed the SEC. From this experience, she has gained better insight into the possible legal recourses for Madoff victims. Due to our involvement in the various SEC investigations into ponzi schemes including the Stanford Ponzi Scheme, we have first-hand knowledge of the SEC’s involvement and the OIG’s report to succeed in a potential litigation.
4. With our track record of helping Madoff victims and our wealth of experience in this matter, we are confident that our litigation strategy under the Federal Tort Claims Act (FTCA) has the highest likelihood of obtaining a recovery from the U.S. Government.
5. So far neither plaintiffs nor attorneys for plaintiffs have obtained specific information that supports more than the negligence of the SEC in its investigation. KLS believes it is critical to a successful action against the SEC that further information, which it is optimally positioned to obtain, and which it is currently researching is unveiled as to the conduct of SEC investigations in this case.
6. Confidentiality. The class action will provide some level of anonymity in any action we take. We will attempt to limit discovery to the named plaintiffs only.
Benefits of KLS Proposal
Joining the class action through the SEC administrative claim is a low cost and highly efficient method of litigating to recover your losses.
The more investors that join through this process, the greater the pressure exerted on the SEC to reach an equitable settlement.
You will receive regular updates of our progress and on other related legal actions.
KLS Update on Current Situation in US Courts
There are two cases currently pending that involve Federal Tort Claims Act (“FTCA”) claims against the SEC for its handling of the Madoff Ponzi scheme. The first was filed in the United States District Court for the Southern District of New York on October 14, 2009. See Phyllis Molchatsky, et al. v. United States, case no. 1:09-cv-08697 (LTS). Briefing on the Motion to Dismiss for lack of jurisdiction was completed on June 11, 2010.[1]
The second case was filed in the United States District Court for the Central District of California on December 10, 2009. See Dichter-Mad Family Partners, LLP, et al. v. United States of America, et al., case no. 09-9061. On April 20, 2010, the Court granted Defendant’s Motion to Dismiss for lack of jurisdiction, but provided that “Plaintiffs may file an amended complaint containing new allegations that are reasonably aimed at satisfying Plaintiffs burden as described in this Order.”
These second plaintiffs filed an Amended Complaint on May 17, 2010 (re-filed on May 20, 2010) on the basis of a submission of ‘a document that contains or identifies the mandatory duties that SEC employees failed to follow in their investigations and failures to investigate Madoff’. These plaintiffs were specifically ‘informed by an SEC employee that this document contains mandatory conduct guidelines, duties and policies for SEC employees and it is entitled “The SEC Policies, Procedures and Administrative Regulations.”
In addition with regard to class issues: In June 2009, the District Court for the Eastern District of Louisiana issued an opinion in the Katrina Canal Breaches Consolidated Litigation allowing plaintiffs’ claims under the Federal Tort Claims Act (“FTCA”) to proceed as a class action. The court held that “a class action can be alleged under the FTCA as long as the administrative claim requirements are fulfilled.” In re Katrina Canal Breaches Consolidated Litigation, 2009 U.S. Dist. LEXIS 48837, 265 (E.D.La.). Thus, we would be able to proceed as class action (subject to certification) for all investors who timely file their claims against the Securities Exchange Commission (“SEC”) within the two year period, i.e., by February 16, 2011.
The FTCA provides that the government entity against whom the claim is made (here, the SEC) has six months to respond to the administrative claim. The claimant’s right to sue in court vests once the claimant receives the SEC’s denial of the administrative claim, or six months after the administrative claim is filed, if the SEC fails to respond. Thus, we would define the class to include those investors who (i) file a claim within the two year period and (ii) either receive a denial from the SEC or do not receive a response from the SEC within the six month period.
Concluding Thoughts
The time window for you to join this lawsuit is limited due to the statute of limitations. We are offering a cost effective and efficient method for you to file your claim so that you will benefit from any positive settlement.
We urge all of you to notify other investors to get in touch with us without delay so that we may get all claims in by February 16, 2011.
We shall advance all expenses including but not limited to any expenses incurred by you related to depositions or any other legal proceedings we advise you to attend, including travel expenses.
The sole contingent fee upon which we shall be compensated from the Recovery shall be in the amount awarded by settlement or a judgment of a Court of law. We are seeking a contingency of 15% of the recovery plus reasonable expenses.
Please contact KLS at info@kachroolegal.com or by phone at:
Dr. G. Kachroo : +1 617-864-0755
for further information about KLS, please go to www.kachroolegal.com
We recommend that all Stanford investors file a U.S. Securities and Exchange Commission (SEC) administrative claim under the Federal Tort Claims Act (FTCA) through Kachroo Legal Services, P.C. (KLS) as soon as possible and no later than February 16, 2011. Due to the statute of limitations KLS will prepare to file the class action suit within six (6) months after that date. It is recommended that investors submit their information to KLS well before this deadline to ensure their claims are timely processed. KLS will file a class action lawsuit against the SEC (similar to a normal class action but in this instance only for those investors for whom KLS has filed an SEC administrative claim). Only those clients who have filed an SEC administrative claim under the FTCA will be represented in the KLS class action. All investors would be represented by our class action, both domestic U.S. investors and international investors around the world affected by the SEC’s actions and omissions.
We anticipate filing thousands of claims (as there are over 20,000 investors into the Stanford Ponzi Scheme), so to ensure your claim is handled promptly, you should file as soon as possible.
We will help you by processing and filing your FTCA claim with the SEC. In addition, KLS will file a lawsuit against the SEC on behalf of everyone who has filed FTCA claims by the deadline.
All investors must sign the KLS engagement letter attached herewith in English or in Spanish. The cost for both the SEC administrative claim work and the lawsuit will be as follows per investor:
For investors who have invested less than $100,000 USD total through all their accounts - $500;
For investors who have invested between $100,000 USD and $1million USD - $1000;
For investors who have invested more than $1million USD through all their accounts - $1500.
This will be the only cost per investor for all such legal services other than a contingency fee of $15% of the recovery obtained by KLS as well as reasonable costs and expenses of the litigation.
Why Choose KLS?
1. Dr. Kachroo, Principal of KLS, is also Vice-Chairman of the Global Alliance, a civil society whose members hip consists of 5000 attorneys from around the world.
2. KLS has experience working closely with the SEC and their offices. We are currently in discussions with the SEC to establish the Madoff Task Force and develop an alternative dispute resolution mechanism to settle cases against implicated financial institutions.
3. As a part of the Markopolos team, Dr. Kachroo represented the whistleblower that first discovered the Madoff fraud and exposed the SEC. From this experience, she has gained better insight into the possible legal recourses for Madoff victims. Due to our involvement in the various SEC investigations into ponzi schemes including the Stanford Ponzi Scheme, we have first-hand knowledge of the SEC’s involvement and the OIG’s report to succeed in a potential litigation.
4. With our track record of helping Madoff victims and our wealth of experience in this matter, we are confident that our litigation strategy under the Federal Tort Claims Act (FTCA) has the highest likelihood of obtaining a recovery from the U.S. Government.
5. So far neither plaintiffs nor attorneys for plaintiffs have obtained specific information that supports more than the negligence of the SEC in its investigation. KLS believes it is critical to a successful action against the SEC that further information, which it is optimally positioned to obtain, and which it is currently researching is unveiled as to the conduct of SEC investigations in this case.
6. Confidentiality. The class action will provide some level of anonymity in any action we take. We will attempt to limit discovery to the named plaintiffs only.
Benefits of KLS Proposal
Joining the class action through the SEC administrative claim is a low cost and highly efficient method of litigating to recover your losses.
The more investors that join through this process, the greater the pressure exerted on the SEC to reach an equitable settlement.
You will receive regular updates of our progress and on other related legal actions.
KLS Update on Current Situation in US Courts
There are two cases currently pending that involve Federal Tort Claims Act (“FTCA”) claims against the SEC for its handling of the Madoff Ponzi scheme. The first was filed in the United States District Court for the Southern District of New York on October 14, 2009. See Phyllis Molchatsky, et al. v. United States, case no. 1:09-cv-08697 (LTS). Briefing on the Motion to Dismiss for lack of jurisdiction was completed on June 11, 2010.[1]
The second case was filed in the United States District Court for the Central District of California on December 10, 2009. See Dichter-Mad Family Partners, LLP, et al. v. United States of America, et al., case no. 09-9061. On April 20, 2010, the Court granted Defendant’s Motion to Dismiss for lack of jurisdiction, but provided that “Plaintiffs may file an amended complaint containing new allegations that are reasonably aimed at satisfying Plaintiffs burden as described in this Order.”
These second plaintiffs filed an Amended Complaint on May 17, 2010 (re-filed on May 20, 2010) on the basis of a submission of ‘a document that contains or identifies the mandatory duties that SEC employees failed to follow in their investigations and failures to investigate Madoff’. These plaintiffs were specifically ‘informed by an SEC employee that this document contains mandatory conduct guidelines, duties and policies for SEC employees and it is entitled “The SEC Policies, Procedures and Administrative Regulations.”
In addition with regard to class issues: In June 2009, the District Court for the Eastern District of Louisiana issued an opinion in the Katrina Canal Breaches Consolidated Litigation allowing plaintiffs’ claims under the Federal Tort Claims Act (“FTCA”) to proceed as a class action. The court held that “a class action can be alleged under the FTCA as long as the administrative claim requirements are fulfilled.” In re Katrina Canal Breaches Consolidated Litigation, 2009 U.S. Dist. LEXIS 48837, 265 (E.D.La.). Thus, we would be able to proceed as class action (subject to certification) for all investors who timely file their claims against the Securities Exchange Commission (“SEC”) within the two year period, i.e., by February 16, 2011.
The FTCA provides that the government entity against whom the claim is made (here, the SEC) has six months to respond to the administrative claim. The claimant’s right to sue in court vests once the claimant receives the SEC’s denial of the administrative claim, or six months after the administrative claim is filed, if the SEC fails to respond. Thus, we would define the class to include those investors who (i) file a claim within the two year period and (ii) either receive a denial from the SEC or do not receive a response from the SEC within the six month period.
Concluding Thoughts
The time window for you to join this lawsuit is limited due to the statute of limitations. We are offering a cost effective and efficient method for you to file your claim so that you will benefit from any positive settlement.
We urge all of you to notify other investors to get in touch with us without delay so that we may get all claims in by February 16, 2011.
We shall advance all expenses including but not limited to any expenses incurred by you related to depositions or any other legal proceedings we advise you to attend, including travel expenses.
The sole contingent fee upon which we shall be compensated from the Recovery shall be in the amount awarded by settlement or a judgment of a Court of law. We are seeking a contingency of 15% of the recovery plus reasonable expenses.
Please contact KLS at info@kachroolegal.com or by phone at:
Dr. G. Kachroo : +1 617-864-0755
for further information about KLS, please go to www.kachroolegal.com