‘They’re fighting over our money’

Those searching for Stanford dollars get twice as much as victims 

BY BILL LODGE
blodge@theadvocate.com 
June 23, 2014 

Court-authorized professionals cleaning up the debris of one of the largest Ponzi schemes in U.S. history have been paid $64.2 million — more than twice the amount returned so far to victims — and are seeking more compensation.

 Those professionals have recovered less than $300 million of the estimated $5.5 billion to $7 billion stolen from thousands of victims in Louisiana and in places as distant as Venezuela by convicted Houston swindler Robert Allen Stanford, whose company operated an office in Baton Rouge.

 Attorneys, accountants and investigators searching since February 2009 for the mountains of money had been paid $64.2 million of the victims’ money recovered by the end of 2013.

 Expenses incurred in the search by the court receivership team cost another $54.7 million, federal court records show.

 That’s $118.9 million of victims’ money spent on the search for Stanford’s swindled dollars out of a total of $240.9 million recovered by Dec. 31 in the five-year effort.

 Victims have received a combined $30 million — paid last year as a first distribution to some of the thousands of Stanford’s victims in Louisiana and other states. Another $25 million authorized by a judge for payment to victims has yet to be distributed.

 Now, Dallas attorney Ralph S. Janvey, the court-appointed receiver in charge of the search, is asking U.S. District Judge David C. Godbey for permission to withdraw $5.8 million from a disputed pot of $17.3 million in fees for payment to members of his search team.

 Don’t do it, a court-appointed examiner and the U.S. Securities and Exchange Commission have implored Godbey.

 In Louisiana, some of Stanford’s victims have the same response.

 Kathy and Louis Mier, of Zachary, were defrauded of $240,000 they invested with Stanford.

 “Janvey, from day one, was trying to make money off us,” Kathy Mier, a 66-year-old retired schoolteacher, said. “We resent the fact that those lawyers take advantage of us. They’re fighting over our money."

 Richard Cochran, 82, of Baton Rouge, who declined to specify his total loss, noted that he received 21.7 percent of his investment in the form of interest payments before the SEC shut down Stanford’s operations in February 2009.

 Now, the Korean War veteran said, Janvey’s team has demanded that he make payments into the Stanford receivership equal to that 21.7 percent.

 Cochran said he refused, noting that compliance would increase his Stanford loss to 100 percent.

 “Janvey said in the beginning all we’re going to get is pennies on the dollar,” Cochran recalled. “He’s making that come true.”

 Added Cochran: “He (Janvey) probably ought to get what we get on our claims — 1 percent.”

 In his filings in Dallas, Janvey has told the judge his team should receive $5.8 million of the disputed $17.3 million that Janvey contends has already been earned.

 By the middle of March, Janvey reported to Godbey, the receivership had recovered another $23 million in stolen investor funds.

 John J. Little, a Dallas attorney who has served as court-appointed examiner of the Stanford receivership for the past five years, argued June 9 that the judge should not release any portion of the $17.3 million to Janvey’s team.

 “What we know at present is that the receiver and his professionals have not identified any significant Stanford assets or accounts that were not identified in the earliest days of the receivership,” Little said.

 In addition, Little told Godbey, Janvey has not distributed $25 million of $55 million the judge authorized for pro rata payment last year to Stanford victims.

 Janvey’s 2009 demand was opposed by both the SEC and the investors lucky enough not to have lost all their money.

 The receiver’s motion for seizure of their remaining money also was denied by Godbey after SEC officials said commission policy is not to recover money from innocent fraud victims who lost more money than they received from a bogus investment operation.

 But Janvey, spending recovered Stanford funds, appealed the decision to the 5th U.S. Circuit Court of Appeals in New Orleans, where he lost.

 Both Little and the SEC now argue that the receivership’s record should be much closer to completion before the judge considers release of any of the $17.3 million withheld from Janvey’s team over the past five years.

 “What has actually been distributed to Stanford’s investors — approximately $30 million — is less than half what has already been paid to the receiver’s professionals,” Little added.

 Little said no more investor money should be paid to Janvey’s team until the total paid to the victims “significantly exceeds the amounts paid to the receiver and his professionals.”

 Said SEC attorney David B. Reece: “The question is not whether the receiver and supporting professionals should receive compensation. The receiver’s team has been paid.”

 Reece noted Janvey’s team has been paid $34 million more than Stanford’s victims.

 “There is no reason to release further funds,” Reece told the judge.

 Meanwhile, Stanford, 64, continues to maintain he is innocent of all charges for which he is serving a prison sentence of 110 years. He has filed an appeal in an effort to reverse his conviction.

 The SEC and Godbey have concluded that Stanford and his companies operated a giant Ponzi scheme from the beginning of their operations.

 Few, if any, investments are actually made in a Ponzi scheme. Instead, operators of the scheme skim most of the money that is put in by victims on the basis of false information provided by the criminals.

 Some of the early investors receive small portions of their own money and that of later investors. While those investors believe the money is profit from actual operations, it is simply seed money designed to attract additional cash from people hearing of the program’s reputed success.

 Stanford Group Co., insured by the federally chartered and industry-funded Securities Investor Protection Corp., received billions of dollars that victims were told would be secure at Stanford International Bank in the Caribbean nation of Antigua.

 Instead, a Houston jury concluded, the majority of the money went to Stanford and several of his associates. 

The SEC, in effect, directed SIPC to cover individual Stanford investor losses up to $500,000.

 SIPC officials refused and won a judgment from a federal district judge in Washington, D.C. The SEC is appealing that decision.

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It's a Scandal that Fraudsters Bernie Madoff and Robert Allen Stanford Were Not Shut Down by the SEC

Believe it or not Bernie Madoff’s phony monthly trading reports listed trades on days the market was closed, or at prices that were far off the market or in volumes that simply never existed. Yet, Madoff’s scam continued for 36 years, from 1972 until 2008, as the SEC was incapable of discovering the truth, and Madoff’s clients never read their phoney monthly statements, since through bull and bear markets Madoff always turned in profits that were not real. And shocking as it may seem, the SEC knew that Stanford was a fraud early on in 1998, but chose not to prosecute as the securities he sold were short term notes of a foreign bank supposedly yielding 12% and were not shares of stock. Imagine the stupidity of that pusillanimous decision. What a bunch of wimps!

 Such were the most shocking revelations at a Boston College Conference on the Madoff and Stanford Cases ” The Legacy of Mr. Ponzi,” that the American College of Bankruptcy organized last Friday, at which I was a speaker on the Madoff crimes. I emphasized the lackadaisical performance by the Securities and Exchange Commission as the key absurdity of allowing these crimes to damage so many naive investors who wanted to believe against all past investment history that Madoff’s year-in,year-out returns of 9%-10% and Stanford’s offer of a 12% coupon on his bank’s notes could somehow be a rational expectation by small investors entrusting these two con men with most of their valuable savings. By comparison, Mr. Ponzi was put out of business in a very short time long before there was even an SEC existing. So much for the securities regulatory process where scams are concerned. It is a travesty of justice.

 Clearly, the SEC should have had the smarts and the will to put Madoff and Stanford out of business before they were able to do so much harm. The fact that the SEC was inadequate to the challenge should give legislators the motivation to order a review of the agency’s leadership, manpower, and its statutory powers. It appears that the political connections of Madoff and the political contributions by Stanford may well have dulled or dented the investigations into their chicanery and kept the cops off the beat. Especially, as in the case of Madoff, the recent conviction of 5 employees together with the conviction of Madoff’s brother and other high-level employees reveals clearly the conspiracy pretty well included between 15 and 20 people. Stanford’s behavior involved an offshore bank in the Caribbean and so must not have been seen as so crucial to the SEC. It’s ability to make securities criminal cases is far overshadowed by the Justice Department.

 After 6 years of progress, Irving H. Picard, the Trustee for the Liquidation of Bernard L. Madoff Investments Securities, has been able to pay the innocent Madoff investors back 56% of the money they lost. With any luck in another 155 claims for $6 billion more payments, Picard is hopeful of returning 100% to those legitimate Madoff losers. “ My goal is 100%”, he said before a crowd of over 100 students and bankruptcy experts at Boston College Law School in Newton, Mass. on Friday. He has spent $980 million in legal and administrative fees to collect $9.8 billion so far. By comparison the Stanford fundraising is only about $240 million, while the costs have been $120 million or 50% of receipts. Picard revealed for the first time that fabricated backdated trades for Madoff’s sons(one committed suicide) in Apple common shares that threw off paper profits of $6.5 million suggests that they “should have known” the enterprise was a scam.

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Senator Vitter's Letter to Sharon Bowen

Senator Vitter's Letter to Sharon Bowen

 
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U.S. Senator sets hurdle for CFTC hopeful Bowen

(Reuters) - A U.S. senator questioned a candidate for the Commodity Futures Trading Commission over a decision that left victims of the Allen Stanford fraud out of pocket, raising a hurdle she must jump to get the job.

 In a letter on Friday, Louisiana Republican David Vitter asked Sharon Bowen - who has been nominated by President Barack Obama to join the derivatives regulator - a series of 10 questions about her role in the decision.

 Bowen is the acting head of the Securities Investor Protection Corporation (SIPC), the body that seeks to recoup money for investors if their broker goes under.

 SIPC holds there is no basis in law to refund people who lost money in the $7 billion Ponzi scheme set up by Allen Stanford, who is serving a 110-year jail sentence.

 The Securities and Exchange Commission (SEC) lost a court case in which it contested that decision, though an appeal in the case is still pending. A group of 14 senators and fraud victims are supporting the SEC's legal fight.

 "It seems that SIPC continues to prioritize protecting its Wall Street members by hiring lawyers to fight the SEC in court rather than protect investors," Vitter said in his letter.

 SIPC, created under the Securities Investor Protection Act (SIPA), is funded by Wall Street firms.

 Vitter also asked whether SIPC had received any outside funding for its legal defense, whether its decision had been influenced by the banks, and wanted to know whether Bowen had received any gifts while at SIPC.

 Bowen and two other nominees to the five-strong CFTC met little pushback in a Senate committee at a confirmation hearing on March 6, but it is no surprise that the Stanford scandal is coming to haunt Bowen. Thad Cochran, the highest-ranking Republican on the Committee, mentioned the scandal during the meeting, though he did not pursue the issue.

 The agency - down to just two Commissioners, one Democrat and one Republican - is facing a leadership vacuum just as it is implementing some of the most fundamental reforms of financial markets after the 2007-09 credit meltdown.

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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:  

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Justices Throw a Rope to Stanford Ponzi Victims

WASHINGTON (CN) - Federal law does not preclude investors allegedly defrauded by R. Allen Stanford's $7 billion Ponzi scheme from attempting recovery via state class actions, the Supreme Court ruled Wednesday.

 For nearly 15 years, Stanford Group Co. and related entities sold certificates of deposit issued by its Antigua-based Stanford International Bank, and then used investor funds to cover its liabilities.

 Its eponymous leader was sentenced in 2012 to 110 years in federal prison after a federal jury in Houston, Texas, convicted him on 13 of 14 counts of conspiracy, wire fraud and mail fraud.

Read the full transcript from the Courthouse News Service here. 

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

SLUSA - The full Court Ruling

Great news for ALL victims! With the SLUSA ruling going in favour of the victims all the FROZEN court cases can now proceed.

To view the full court ruling on SLUSA click Here

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U.S. Justices say Allen Stanford Victim Lawsuits can go Forward

(Reuters) - The Supreme Court on Wednesday ruled that lawyers, insurance brokers and others who worked with convicted swindler Allen Stanford cannot avoid lawsuits by investors seeking to recoup losses incurred in his $7 billion Ponzi scheme.

On a 7-2 vote the court held that lawsuits filed in state court can go forward. New York-based law firms Chadbourne & Parke and Proskauer Rose and insurance brokerage Willis Group Holdings Plc were all sued by former Stanford investors. The investors also sued financial services firm SEI Investments and insurance company Bowen, Miclette & Britt.

Writing for the majority, Justice Stephen Breyer said the Securities Litigation Uniform Standards Act did not prevent the state lawsuits from proceeding. The law says that state lawsuits are barred when the alleged misrepresentations are "in connection with" the purchase or sale of a covered security.

As the defendants in the case were not selling securities traded on U.S. exchanges, "it is difficult to see why the federal securities laws would be - or should be - concerned with shielding such entities from lawsuits," he wrote.

The defendants sought Supreme Court review after the New Orleans-based 5th U.S. Circuit Court of Appeals in March 2012 said the lawsuits brought under state laws by the former Stanford clients could go ahead.

The former Stanford clients are keen to pursue state law claims because the Supreme Court has previously held that similar so-called "aiding and abetting" claims cannot be made under federal law.
The class action lawsuits filed by the former investors accused Thomas Sjoblom, a lawyer who worked at both law firms, of obstructing a Securities and Exchange Commission probe into Stanford, and sought to hold the other defendants responsible as well.

The Obama administration, representing the SEC, sided with the defendants over the interpretation of the state law in an avowed effort to protect the agency's own authority to pursue wide-ranging investigations.

The administration pointed out that the "in connection with" language in SLUSA that limits state court lawsuits mirrors language in federal law that gives broad authority of the SEC to pursue such misrepresentations. Therefore, the administration urged the court to give the phrase a broad interpretation.

Stanford's fraud involved the sale of certificates of deposit by his Antigua-based Stanford International Bank. Much of the litigation centers on whether these qualified as securities under applicable laws.

The cases are Chadbourne & Parke LLP v. Troice et al, U.S. Supreme Court. No. 12-79; Willis of Colorado Inc et al v. Troice et al, U.S. Supreme Court, No. 12-86; and Proskauer Rose LLP v. Troice et al, U.S. Supreme Court, No. 12-88.

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Politicians yet to return big money from Stanford’s Ponzi Scam

Five years after R. Allen Stanford’s investment companies collapsed in an infamous multibillion-dollar Ponzi scheme, records show that the receiver charged with recouping money for victims still is chasing a long list of politicians.

Stanford was a generous and bipartisan donor to political campaigns. After his conviction, Ralph Janvey was appointed by the court as receiver and given the task of tracking down and recovering Stanford’s fraudulent expenditures so the money could be returned to the Ponzi scheme victims.

Some of the big donors have returned money, even if they had to be sued: The Democratic Senatorial Campaign Committee has returned $950,000, and the National Republican Congressional Committee gave back nearly $250,000.

But a number of other campaigns have not. By Mr. Janvey’s calculation, nearly $120,000 in tainted donations should go to creditors.

The Obama campaign has not returned $4,600, and Rep. Pete Sessions, Texas Republican, and the New Jersey Democratic State Committee each owes $10,000, according to the receiver’s most recent list.

A spokeswoman for Mr. Sessions said he has already gotten rid of money from Stanford, who is serving a 110-year prison sentence on fraud charges.

“Congressman Sessions donated to charity the dollar amount of all contributions from individuals charged in the case,” Sessions spokeswoman Torrie Miller wrote in an email.

Federal Election Commission rules allow politicians to disgorge unwanted or illegal donations by donating to charity, but that won’t get Mr. Sessions or any other lawmaker off of Mr. Janvey’s list.

Scott Powers, an attorney for Mr. Janey, said contributions to charity that are equal to the amount of campaign donations from Stanford don’t make any difference.

“The money at issue did not rightfully belong to Mr. Stanford,” he said.

“It was not rightfully transferred to the political committees. And so the political committees are not entitled to decide that the money should be given to charity rather than given to the receiver for distribution to the victims from whom the money was taken in the first place.”

The DSCC and the NRCC, which have returned their money, did so only after losing arguments in court. In perhaps a rare example of Capitol Hill bipartisanship, the fundraising committees said Mr. Janvey’s demand wasn’t timely.

But the 5th U.S. Circuit Court of Appeals ruled in Mr. Janvey’s favor in October 2012.

The problem for Mr. Janvey now is that the donations that still haven’t been collected aren’t worth the expense of filing lawsuits. Most of the outstanding contributions are for a few thousand dollars each.

Other top recipients on the receiver’s list include Sen. John Cornyn, Texas Republican, who received $6,000 from Stanford, and congressional Delegate Donna M. Christensen, a Democrat who represents the Virgin Islands and accepted $5,000 from him.

Also listed are Senate Minority Leader Mitch McConnell, Kentucky Republican, at $2,500, and former Rep. Rahm Emanuel, Illinois Democratic and current Chicago mayor, for $3,000.

Cornyn spokeswoman Megan Mitchell said the senator gave the money he received from Stanford to the Big Brothers Big Sisters of America and sent letters to federal agencies to ensure money caught up in the Stanford scheme was returned to investors.

Ms. Mitchell also said Mr. Cornyn co-sponsored a resolution calling on the Treasury secretary to “use the voice and the vote” of the U.S. to oppose World Bank or International Monetary Assistance to Antigua until its government cooperates with U.S. efforts to compensate Stanford victims.

Stanford’s fraud centered at his offshore bank in Antigua.

Still, Mr. Powers said, charitable contributions don’t do Stanford victims much good.

“For economic reasons, the receiver is not in a position to pursue litigation with every politician who received contributions from Stanford,” Mr. Powers said. “The receiver nevertheless calls on the remaining holdouts to do the right thing and to return the contributions for the benefit of the victims of the Stanford fraud.”

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Five years since swindle, some Stanford victims now threatened with lawsuit

By Stephanie Riegel Published Feb 17, 2014 at 2:38

This month marks five years since investors with the now-defunct Stanford Group—which had a large presence in Baton Rouge—first learned they were victims of a $7 billion Ponzi scheme. And, though R. Allen Stanford has since been convicted and sent to prison for the massive fraud, most of the 28,000 investors who thought they were buying certificates of deposit from Stanford International Bank in Antigua have yet to recoup more than 1% of their lost savings. 

Now, adding insult to injury, some local victims are getting emails from a receiver in the case threatening to sue them in connection with claims they filed to recover their funds. "We're being terrorized again after five years," says Blaine Smith, a local Stanford victim, who lost more than $1 million through Stanford and is among those who have received the emails. "It's really kind of sick."

 Smith says the emails are coming from Grant Thornton, an Antiguan-based receiver that is supposed to be helping victims recoup lost funds. There is also a U.S. receiver in the case. Smith has filed claims with both. 

In his letter, Grant Thornton tells Smith that because he withdrew nearly $22,000 in interest payments from his account with Stanford back in 2008—before the Ponzi scheme had been uncovered by the Securities and Exchange Commission—he must return the money before his claim is processed. "Failure to repay may result in the estate seeking judgment against you," the letter reads.

 Smith has been in contact with Angela Kogutt, the head of the Stanford Victims Coalition, which advocates in Washington, D.C., for Stanford victims. In an email to Smith, Kogutt says other victims have also received the email and that she is trying to get to the bottom of the matter.

 Smith has also contacted the offices of U.S. Sens. Mary Landrieu and David Vitter, as well as U.S. Rep. Bill Cassidy, who he says have been very supportive and helpful.

 Stanford is serving a 110-year prison sentence in Florida, while multiple lawsuits rage on over victim compensation. Kogutt was recently quoted in the national media as saying it could be years before victims recoup any of their lost investments.

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Five years after Stanford scandal, many victims penniless

By: Scott Cohn

Five years after learning they were victims of a $7 billion Ponzi scheme, investors in the Stanford Financial Group say they feel abandoned, even though their losses rival those in the Madoff scam that was revealed two months earlier.

Unlike the Madoff case, in which a court-appointed trustee has said he is well on his way to recovering all of the investors' principal—estimated at $17.5 billion—Stanford victims have recovered less than one penny on the dollar since the Securities and Exchange Commission sued the firm and a court placed it in receivership on Feb. 17, 2009.

"I do have to say the Stanford victims do feel like the stepchildren in the Ponzi world," said Angela Shaw Kogutt, who estimates her family lost $4.5 million in the scam. Shaw heads the Stanford Victims Coalition, which has been trying for years to drum up support in Washington.

Some 28,000 investors—10 times the number of direct investors in the Madoff case—bought certificates of deposit from Stanford International Bank in Antigua, which was owned by Texas financier R. Allen Stanford. Stanford's U.S. sales force had promised the investors—many of them retired oil workers—that the CDs were at least as safe as instruments from a U.S. bank. But a jury later found most of the clients' money financed Stanford's lavish lifestyle instead of the high-grade securities and real estate it was supposed to. 

Stanford, who portrayed himself as a self-made billionaire, exuded the American Dream. He claimed to have built his global financial empire from a family insurance business in his rural hometown of Mexia, Texas. A generous contributor to politicians of all stripes, Stanford effectively took over the financial sector in Antigua while nurturing rumors of his unique connections.

But asked directly by CNBC in 2009 about suggestions he was a government informant, Stanford demurred.

"You talkin' about the CIA?" he asked. "I'm not gonna talk about that."

On the eve of the fifth anniversary of the scandal, Dallas attorney Ralph Janvey, appointed by a federal judge to head the receivership and round up assets for the victims, said he feels the victims' pain.

"Even though my team and I have worked hard and made much progress over the last five years, the process of unwinding the fraud and the pace of recovering money have been frustratingly slow," Janvey wrote in an open letter to "all those affected by the Stanford fraud."

In the Stanford case, progress is relative.

Last April, Janvey won court approval to begin distributing $55 million to some investors. In the letter, he said $25 million has already been distributed, another $5.5 million could be paid this month and another $18 million in Stanford assets from Canada could be distributed this year as well. 

But the rest of the investors' money was either spent by Stanford or is tied up in litigation. Janvey said some $200 million in assets is in Swiss banks and tied up in the criminal forfeiture process. He has sued dozens of people and institutions that allegedly profited from the Ponzi scheme, seeking more than $680 million. The prospects for recovering anything close to that amount, however, are unclear.

"Asset recovery litigation is difficult, lengthy and expensive," Janvey wrote. "The defendants, many of whom have significant resources, are defending the cases aggressively, and many of the favorable rulings in these cases have already been appealed."

Further complicating matters, victims allege: the Justice Department has not been as aggressive in the Stanford case as it has been in the Madoff case.

Even the federal judge overseeing the Stanford receivership, David Godbey in Dallas, made note of the apparent contrast during a status hearing Jan. 16, a week after authorities announced a $2 billion settlement with JPMorgan Chase for its role in the Madoff scandal.

"I read with interest in the media that JPMorgan Chase is paying the Madoff folks a whole bunch of money. I assume our check will follow shortly," Godbey said, according to a transcript of the hearing.

No fewer than five banks—though not JPMorgan Chase—have been sued in the Stanford case for allegedly facilitating the fraud, but there have been no signs of interest from criminal authorities. A spokesman for the Justice Department did not respond to a request for a comment.

The government did prosecute Allen Stanford and several of his top executives. Stanford, 63, is serving a 110-year sentence at a federal penitentiary in Florida. He has appealed his 2012 conviction on 13 criminal counts, but with his assets frozen and having fired his court-appointed attorney, Stanford is representing himself and filing handwritten legal motions from prison. One was filed March 4, 2013 and another on March 12, 2013.

"I or any other American citizen deserve better than this," he wrote in a filing last March. "The presumed innocent part of our constitution is only a myth in America today."

The pending appeal is yet another complication for Stanford's victims, since approximately $300 million he was ordered to forfeit as a result of his conviction cannot be released until the appeals process is complete.

But one of the biggest sources of frustration for the victims is another stark contrast to the Madoff case. 

The Securities Investor Protection Corp. (SIPC), which insures U.S. brokerage accounts, has refused to pay Stanford victims, while qualified Madoff victims are eligible for SIPC's maximum coverage of $500,000 per account.

The SEC sued SIPC in 2012 on behalf of the Stanford investors, arguing they also were entitled to coverage, as Stanford's U.S. brokerage was an SIPC member. But SIPC says its insurance covers only securities, and even if the Stanford CDs are considered securities, they are worthless.

The judge in the case sided with SIPC. A federal appeals panel is considering the SEC's appeal, and victims are anxiously waiting for a ruling.

"I really think the only chance the victims really have to recover something is either years down the road or through SIPC," said Kogutt of the victims' coalition.

Because many of the victims are elderly, there is no time to waste. Since the scandal broke in 2009, 176 of Stanford's investors have died. 

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

Stanford Lodges another appeal March 12th 2013

Allen Stanford lodged a second appeal on March 12th 2013, this is particularly relevant to victims since approximately $300 million he was ordered to forfeit as a result of his conviction cannot be released until the appeals process is complete.

 Allen Stanford intends to represent himself in the appeal, below is the hand written letter Stanford sent to the 5th circuit court of appeals, it makes interesting reading and shows Stanford's state of mind.

Stanford Appeals Letter Mar12 2013 by Stanfords Forgotten Victims

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

Stanford Lodges Appeal March 4th 2013

Allen Stanford lodged an appeal on March 4th 2013, this is particularly relevant to victims since approximately $300 million he was ordered to forfeit as a result of his conviction cannot be released until the appeals process is complete.

 Allen Stanford intends to represent himself in the appeal, below is the hand written letter Stanford sent to the 5th circuit court of appeals, it makes interesting reading and shows Stanford's state of mind.

Stanford Appeal Mar 4 2013 by Stanfords Forgotten Victims

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Open Letter From Stanford Receiver Dated February 14, 2014

Stanford Financial Group Receivership 

 1029 State Highway 6 North I Suite 650-272 1 Houston, TX 77079 

 Phone 866.964.6301 

 February 14, 2014

 To All Those Affected by the Stanford Fraud:

 It has been five years since the Court appointed me as Receiver to unwind the world-wide Ponzi scheme perpetrated by Allen Stanford and those who aided, abetted and enabled him. I know that these continue to be very difficult times for the thousands of you whose lives were impacted, and in many cases devastated, by the Stanford fraud. Even though my team and I have worked hard and made much progress over the last 5 years, the process of unwinding the fraud and the pace of recovering money have been frustratingly slow. Unfortunately, the costs associated with this process have been substantial. Although many challenges still lie ahead, the entire Receivership team and I are committed to working as hard as we can to recover as much money as we can for the eligible claimants.

To read the full transcript 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/

Stanford Victims Coalition Update Regarding SIPC

Dear SVC Members,

 I apologize for the gap in time between updates, but I have some very exciting news today about a project I have been working on full-time all year—a legislative remedy that should get us SIPC if the bill is passed—regardless of the outcome of the SEC vs. SIPC appeal (which could still go our way). “The Restoring Main Street Investor Protection and Confidence Act,” is being introduced in the House today with a Senate companion bill to follow. A hearing of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises is set for Thursday, November 21 (victims are encouraged to attend and I will be testifying along with another Stanford victim). A Senate Banking Committee hearing will be held as well, but a date has not been set.............


To read the Complete Update from SVC Visit: http://sivg.org.ag/topic236.html 


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

U.S. lawmakers seek fix to help investors file claims against brokers

Nov 20 (Reuters) - A bipartisan group of U.S. House and Senate members is seeking to make it easier for investment fraud victims to seek compensation, after investors in Allen Stanford's Ponzi scheme were deemed ineligible under current law to file claims.

The bill, introduced by Louisiana Republican Senator David Vitter, New York Democratic Senator Charles Schumer, New Jersey Republican Rep. Scott Garrett and New York Democratic Rep. Carolyn Maloney, would bestow U.S. securities regulators with greater powers to oversee the process of determining whether customers of failed brokerages qualify for compensation.

The legislative proposal comes as the Securities and Exchange Commission awaits a crucial decision from a U.S. appeals court over the fate of the Stanford victims.

The SEC is trying to get the court to force an industry-backed fund that protects investors to start court proceedings so Stanford victims can file claims to recover a least a portion of the millions they lost.

The Securities Investor Protection Corp., or SIPC, which administers the fund, has refused the SEC's request, saying Stanford investors do not meet the legal definition of "customer" under the federal law designed to protect investors if their brokerage collapses.

SIPC uses funds paid by the brokerage industry to compensate investors in the event of a bankruptcy, such as the one that occurred at Lehman Brothers in 2008.

 Allen Stanford was sentenced in 2012 to 110 years in prison for bilking investors with fraudulent certificates of deposit issued by Stanford International Bank, his bank in Antigua.

Many of the investors who purchased the products, however, did so through his Houston, Texas-based brokerage, Stanford Group Co.

SIPC argues that investors in the scheme entrusted their money to the offshore, unregulated Antiguan bank and not to the U.S. broker-dealer. Moreover, it says that Stanford's investors actually did receive their certificates of deposit, as promised, even though they turned out to be virtually worthless.

A federal district judge agreed with SIPC's legal position in July 2012, and tossed out the SEC's lawsuit.

The SEC appealed the ruling before the U.S. Court of Appeals for the District of Columbia in October, and is awaiting a decision.

 SIPC's refusal to let Stanford victims file claims has frustrated many lawmakers on Capitol Hill, including Vitter, who has been among the most vocal in fighting for the Stanford victims.

"The Stanford Ponzi scheme devastated many Louisiana families who invested their hard-earned savings in good faith that it would be there for them when they retire," Vitter said in a statement issued on Wednesday.

"Our bill will fix a key problem we've seen with the system, which currently allows SIPC's Wall Street members to benefit economically from the SIPC guarantee while denying the claims of legitimate victims," he added.

The legislative proposal by the four lawmakers will be vetted in a hearing before a subcommittee of the House Financial Services Committee on Thursday.

Among the witnesses scheduled to testify are Stephen Harbeck, the president of SIPC, a representative from Wall Street's leading brokerage trade group, and Angie Kogutt, a Stanford victim in charge of the Stanford Victims Coalition.

The 19-page bill would amend the definition of "customer" to ensure that investors who deposit cash to buy securities can still be covered by SIPC protection, even if the money is initially given to a firm that is not a SIPC member.

 It would also give the SEC more authority to force SIPC to act without the need for court approval.  

Read More: http://sivg.org.ag/topic235.html  

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

LEGISLATIVE ALERT 11/12

LEGISLATION TO BE INTRODUCED IN HOUSE, HEARINGS SET  BILL ALSO BEING PREPARED IN SENATE!

• Garrett & Maloney to introduce legislation in House. Senator Vitter current lead sponsor in Senate
• House hearings set for 11/21
• Selective grassroots to commence
• 5th Anniversary media needs victims willing to be interviewed by media

Dear NIAP Member & Madoff Investor, 

 Greetings.  I am excited to announce that SIPC legislation is to be introduced later this week or early next followed by Congressional hearings on Thursday, Nov 21. The legislation is to be jointly introduced by Congressman Garrett (NJ) and Congresswoman Carolyn Maloney (NY).  Similar legislation is expected to be introduced shortly in the Senate as well, consistent with the strategy laid out by Congressman Garrett in the last Congress. 

The intention is to have the legislation introduced by approximately 15 co-sponsors, and followed by an extensive outreach effort via Garrett’s and Maloney’s offices, our lobby team and our own grassroots efforts to ramp up sponsorship numbers.

 The specific bill language is still going through final stages, and a bill number and title will be finalized shortly. We will make the bill public as soon as we receive the final version.  As you probably know, it prevents clawback of the innocent, insures SIPC payments to $500,000 based on account statements, and gives the SEC authority over SIPC.

 After hearings, the bill will be moved to a mark-up session in the House Subcommittee on Capital Markets, voted on and moved to the Financial Services Committee.

  Next Steps on Grassroots. We will want to focus our House grassroots efforts on key Financial Services Committee members, as well as other influential House members, particularly those in districts or states with sizeable Madoff and Stanford victim constituents.  Our Senate strategy will focus on Senate members on the Senate Banking Committee and other key Senate members.

  The first wave of Grassroots letters and communications however will go out to those who are sponsoring the legislation at introduction, thanking them for their support and encouraging their reaching out to their colleagues to do the same. 

 Stay Tuned!  In the coming days we will be providing more detailed information, as well as laying out the details for the grassroots outreach.  We will also undertake a rapid fundraising campaign to assist costs of Congressional hearings and grassroots support.

  We look forward to working with all previous and current leaders in this effort as well. 

  Game on!
  Most sincerely,
 Ron Stein, CFP
 President, NIAP

CONTACT INFORMATION:

Victims Needed for Media interviews & Congressional testimony

Volunteers and Funds Needed. Please assist us in whatever way you can!  

Email us at: djmionis@investoraction.org

              rstein@investoraction.org

Call us at: 800-323-9250

www.investoraction.org 

www.fixsipcnow.com

Read More: http://sivg.org.ag/topic233.html 

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

Is the SEC Here to Help Defrauded Victims in a Ponzi Scheme, Or Not?

Posted by Kathy Bazoian Phelps

 The Securities Exchange Commission (SEC) plays an active role in protecting the rights of investors. Its own mission statement is:

The mission of the Securities and Exchange Commission is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.

Yet, in the high-profile Ponzi scheme case of R. Allen Stanford and Stanford Financial Bank, the SEC is finding itself aligned both for and against efforts to recover funds for the benefit of the defrauded victims. Positions taken by the SEC in two different pending litigation matters in the Stanford case may have polar opposite effects on the financial outcome for defrauded investors.

 One case, SEC v. SIPC, now pending in the Circuit Court for the District of Columbia, involves a battle between the SEC and the Securities Investor Protection Corporation (SIPC) over whether the defrauded victims are “customers” under the Securities Investor Protection Act (SIPA) and therefore entitled to payment from SIPC. This is the first time that the SEC has ever commenced an action seeking SIPC coverage for investors. The lower court found that the Stanford investors are not entitled to SIPC coverage, but the SEC continues to champion the cause of the investors in the Circuit Court seeking SIPC coverage for them.

 The other case, Chadbourne & Park LLP v. Troice et al., involves an appeal to the U.S. Supreme Court over the issue of whether Securities Litigation Uniform Standards Act of 1998 (SLUSA) bars lawsuits by a class of victims against third parties to recover their losses from alleged wrongdoers. The Fifth Circuit held that the claims against two law firms, an insurance brokerage firm and a financial services firm could proceed despite SLUSA. The U.S. Government, on behalf of the SEC and other agencies, filed an amicus brief with the Supreme Court arguing that the investor claims should be barred under SLUSA. If the Government’s position prevails, defrauded victims will be denied recovery on their claims.

 In what would be a worst case scenario for the investors, the SEC will lose in SEC v. SIPC so that investors will be denied “customer” status and protection, and the Government’s position in the Chadbourne & Park case will prevail, denying investors the ability to use self-help to sue alleged wrongdoers.

 At a quick glance, it seems that the SEC is on the wrong side of the SLUSA fight in Chadbourne & Park, given the potentially adverse consequences for investors if the SEC’s position is adopted. But perhaps the issue has more do with the way that the applicable statutes are written and interpreted than with any intent on the part of the SEC.

 In Chadbourne & Park, the principal question to be considered by the Supreme Court is:

Does the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), 15 U.S.C. 77p(b), 78bb(f)(1), prohibit private class actions based on state law only where the alleged purchase or sale of a covered security is “more than tangentially related” to the “heart, crux or gravamen” of the alleged fraud?

SLUSA prohibits a state law class action alleging a purchase or sale of a covered security “in connection with” an untrue statement or omission of material fact. A “covered class action” is a lawsuit in which damages are sought on behalf of more than 50 people, and a “covered security” is a nationally traded security that is listed on a regulated national exchange. So the question remaining is: What does “in connection with” mean? 

The target defendants in the litigation at issue argue that “in connection with” covers the following two factual scenarios that touch “covered securities” in the Stanford case: (1) that Stanford lied to purchasers of CDs and told them that the CDs were backed by investments in stocks; and (2) that some of the CD purchasers must have liquidated stocks in order to purchase the CDs.

 The Fifth Circuit did not agree that either of these two scenarios were sufficient to bar claims under SLUSA, holding that the purchase or sale of a covered security must be more than tangentially related “to the ‘heart,’ ‘crux,’ or ‘gravamen’ of the defendants’ fraud.”  The Fifth Circuit held that the claims against the defendants could proceed.

 The Government, on the other hand, has taken the position in its amicus brief to the Supreme Court that the relevant language of SLUSA was taken from the Securities Exchange Act of 1934 and should be read consistently with similar language in Section 10(b) of the Act.  In urging a broad reading of the words “in connection with,” the Government contends that:

[A] broad reading is essential to the achievement of Congress’s purpose in enacting both Section 10(b) and SLUSA.  Under Section 10(b), it enhances the SEC’s ability to protect the securities markets against a variety of different forms of fraud. Under SLUSA, it furthers Congress’s objective of preventing the use of state-law class actions to circumvent the restrictions by the PSLRA [Private Securities Litigation Reform Act] and by this Court’s decisions constraining private securities-fraud suits.

In an amicus brief taking the contrary position, 16 law professors directly challenge the concept of broadening the application of SLUSA to include the certificates of deposit purchased by the Stanford investors. They note that the certificates of deposit are not themselves covered securities and argue that therefore SLUSA should be “interpreted in a way that does not preclude investors from using state courts to pursue claims seeking traditional state law remedies for acts that do not involve covered securities within the meaning of the federal securities laws.”

 To stress their position that SLUSA should not apply to non-covered bank-issued securities that may be potentially backed by covered securities, the 16 law professors float the following hypothetical class action claims, among others, that they contend would improperly be prohibited under SLUSA if interpreted that broadly:

• "A car dealer who lies to customers about the terms of a car loan, where the car loans are securitized in a pool and interests in the pool are sold off as covered securities."
• "A credit card company that securitizes credit card balances fails to pay appropriate wages to telephone operators and answering card holder questions, and the operators file a state class action alleging violations of state wage and hour laws."
• "A nationally-traded securities clearing firm engages in sex discrimination in compensating clerical workers for work done in the securities office, and the workers file a sex discrimination class action law suit."

In summary, where the Supreme Court draws the lines on the application of SLUSA could have a significant impact on a variety of state law claims that may or may not have much to do with securities. The SEC stands behind a broad reading of SLUSA under the pretense of protecting the securities market, but its position appears to have the consequence of harming, not helping, defrauded victims by blocking state law damage claims.

 The issues are undoubtedly complicated, and there are a variety of competing considerations. From the investors’ perspective, however, they can just add this to the list of roadblocks to getting their money back.

Read More: http://sivg.org.ag/topic232.html 

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

Stanford Financial Claims 6th Distribution November 4th 2013

Receiver files 6th Schedule of Payments to be Made Pursuant to the Interim Distribution Plan - On November 4, 2013, the Receiver filed his 6th Schedule of distribution payments with the United States District Court for the Northern District of Texas, Dallas Division. The 6th Schedule will be followed by others, each of which will be submitted by the Receiver on a rolling basis as additional responses to Certification Notices are received and processed.

 To view a copy of the 6th Schedule, please click here: 

 http://sivg.org.ag/topic230.html 
 
 For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group - SIVG official forum http://sivg.org.ag/

Stanford Financial Group Receivership Update

The four schedules filed by the Receiver address total distributions of approximately $12.59 million of the $55 million that has been authorized for distribution by the Court. For Stanford Investors who have not yet received an initial distribution, there are a number of reasons why that may have occurred, including the following:

 •Investor may not have filed a claim with the Receiver’s claim process before the Bar Date fixed by the Court.
•The Investor may not have responded to a request for additional information from the Receiver’s claim processing agent, Gilardi & Co.
 •The Investor may have objected to the Receiver’s Notice of Determination with respect to the Investor’s claim.
•The Investor may not have completed and returned the Receiver’s Certification Form.*
•The Investor’s distribution check may simply be in process, such that it will be listed on subsequent schedules to be filed by the Receiver.

 The Receiver is continuing to process Notices of Determination, objections to Notices of Determination, and Claim Certifications. Additional payment schedules will be prepared and filed on a rolling basis. It is the Receiver’s expectation that additional payment schedules will be prepared and filed every few weeks (provided that there are sufficient claims being processed to justify that pace).

 *The Receiver advises that a significant number of Investors who filed claims and received Notices of Determination have not yet returned completed Certification Forms. Completed Certification Forms must be received before distribution checks are issued.

 Read More: http://sivg.org.ag/topic227.html 

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