Monday, 3 January 2011
Saturday, 1 January 2011
Update from the Joint Liquidators of Stanford International Bank
Source: FRP Advisory
Update from the Joint Liquidators of Stanford International Bank - in Liquidation (SIB) relating to the recent hearing in the High Court of Antigua & Barbuda
Following the previous update on 21 October 2010, the Joint Liquidators of SIB, Nigel Hamilton-Smith and Peter Wastell, can confirm that the judgment has been handed down by the High Court of Antigua & Barbuda (the Court) in respect of the hearing that took place on 18 October 2010.
The Joint Liquidators have been successful in their application and, in its judgment, the Court has given the Joint Liquidators leave to appeal and extended the time for the lodgement of the appeal.
Whilst the Joint Liquidators have taken immediate steps to lodge an appeal, they are also seeking consent from the Court that there is a general stay on the application for their removal, pending a full appeal hearing. The date of this hearing is yet to be confirmed, but the Joint Liquidators are hopeful it will take place early next year.
Nigel Hamilton-Smith commented: “While the court case continues, we remain committed to recovering assets on behalf of SIB investors. As such, the existing team working on the liquidation remains in place.”
Further information will follow when practicable.
In the meantime, all SIB investors who have not yet registered their claim on the Online Claims Management System should do so via the website at https://stanford.frpadvisory.com/, where their claims continue to be processed
Update from the Joint Liquidators of Stanford International Bank - in Liquidation (SIB) relating to the recent hearing in the High Court of Antigua & Barbuda
Following the previous update on 21 October 2010, the Joint Liquidators of SIB, Nigel Hamilton-Smith and Peter Wastell, can confirm that the judgment has been handed down by the High Court of Antigua & Barbuda (the Court) in respect of the hearing that took place on 18 October 2010.
The Joint Liquidators have been successful in their application and, in its judgment, the Court has given the Joint Liquidators leave to appeal and extended the time for the lodgement of the appeal.
Whilst the Joint Liquidators have taken immediate steps to lodge an appeal, they are also seeking consent from the Court that there is a general stay on the application for their removal, pending a full appeal hearing. The date of this hearing is yet to be confirmed, but the Joint Liquidators are hopeful it will take place early next year.
Nigel Hamilton-Smith commented: “While the court case continues, we remain committed to recovering assets on behalf of SIB investors. As such, the existing team working on the liquidation remains in place.”
Further information will follow when practicable.
In the meantime, all SIB investors who have not yet registered their claim on the Online Claims Management System should do so via the website at https://stanford.frpadvisory.com/, where their claims continue to be processed
STANFORD INVESTORS MUST FILE SEC ADMINISTRATIVE CLAIMS TO PRESERVE RIGHTS
The clock is ticking on the statute of limitations, and unless all investors so interested file claims with the SEC before February 16th 2011, we will be barred from taking any action against the agency; forever.
Of the three class-actions against the SEC on behalf of the Madoff victims, we believe this has the best chance of succeeding. Dr. Kachroo has agreed to represent us and pursue this matter on behalf of all Stanford victims.
The suit is for the benefit of all the victims who sign-up, whether domestic (US) or International, and we shall all have equal status.
A Copy of Kachroo Legal Services, P.C. letter of engagement is available on this blog.
1. As this is an action against the US Government, it cannot be a class-action in the normal sense. Only the investors who have joined-in and filed a claim with the SEC under the Federal Tort Claims Act can be included. No other victims will be able to join-in later.
2. After the statute of limitations expires (which we believe will be on February 16th 2011), unless investors have already registered and their claims have been submitted, they will be barred from suing the US Government and the SEC should they decide to do so.
3. Kachroo Legal Services, P.C. must prepare a separate claim for each investor account into Stanford in advance of filing any action on our behalf. This will obviously take some time, and clearly time is of the essence. We should each decide whether to sign-up sooner rather than later.
You can find more information here or in the forum http://svg.creatuforo.com/
You can also contact the law firm directly in the website of Kachroo Legal Services (Email: info@kachroolegal.com)
Of the three class-actions against the SEC on behalf of the Madoff victims, we believe this has the best chance of succeeding. Dr. Kachroo has agreed to represent us and pursue this matter on behalf of all Stanford victims.
The suit is for the benefit of all the victims who sign-up, whether domestic (US) or International, and we shall all have equal status.
A Copy of Kachroo Legal Services, P.C. letter of engagement is available on this blog.
1. As this is an action against the US Government, it cannot be a class-action in the normal sense. Only the investors who have joined-in and filed a claim with the SEC under the Federal Tort Claims Act can be included. No other victims will be able to join-in later.
2. After the statute of limitations expires (which we believe will be on February 16th 2011), unless investors have already registered and their claims have been submitted, they will be barred from suing the US Government and the SEC should they decide to do so.
3. Kachroo Legal Services, P.C. must prepare a separate claim for each investor account into Stanford in advance of filing any action on our behalf. This will obviously take some time, and clearly time is of the essence. We should each decide whether to sign-up sooner rather than later.
You can find more information here or in the forum http://svg.creatuforo.com/
You can also contact the law firm directly in the website of Kachroo Legal Services (Email: info@kachroolegal.com)
Stanford Group Advisers' Assets to Remain Frozen
Source:CourtHouseNews.com
NEW ORLEANS (CN) - The 5th Circuit refused to thaw the assets of financial advisors and Stanford Group employees who are on trial over their roles in an alleged $8 billion Ponzi scheme.
"The assets that the receiver requests stay frozen are assets that are directly traceable to the Stanford Ponzi scheme and are the subject of this dispute," Judge Edward Prado wrote for the federal appeals panel. "The receiver merely asks that those assets continue to be held immovable while his case proceeds to judgment. We do not find that the district court erred in determining that a preliminary injunction was appropriate to protect against monetary asset dissipation."
The Securities and Exchange Commission sued Stanford Group, along with various other Stanford corporate entities including Stanford International Bank (SIB), in February 2009 for allegedly perpetrating the Ponzi scheme. Two months later, the SEC filed suit again against 66 Stanford "financial advisers."
The district court appointed Robert Janvey as receiver to marshal the Stanford estate, and the 5th Circuit ordered the lower court to thaw the frozen accounts of Stanford investors.
Janvey then obtained a preliminary injunction to continue a freeze on the accounts of numerous former financial advisors and Stanford Group employees pending the outcome of the trial.
The employee defendants asked the 5th Circuit to lift the injunction, which they say should not have been ordered while a motion to compel arbitration was pending. They also claimed the district court abused its discretion in granting the preliminary injunction, that the preliminary injunction was overbroad, that the injunction was really an improper writ of attachment, and that the receiver's claims are subject to arbitration.
The 5th Circuit affirmed the lower court's decision on all issues.
"The receiver is in an unenviable position: although the Stanford estate has many thousands of claimants, there are startlingly few assets to disperse to the Stanford victims," Prado wrote.
The three-judge panel found that the district court had the authority to grant an injunction before deciding the motion to compel arbitration, that it did not "overreach," and that Janvey had enough cause to secure a preliminary injunction." The district court did not err when it found, for the purposes of this preliminary injunction proceeding, that Stanford operated as a Ponzi scheme," Prado wrote.
The SEC claims that the Stanford Group committed the fraud for almost 15 years by selling certificates of deposit (CDs) issued by SIB, promising above-market returns and falsely assuring investors that the CDs were backed by safe, liquid investments.
At the time the SEC filed suit, Stanford should have held assets of greater than $7 billion, but actually held assets of less than $1 billion.
Though SIB claimed that it consistently earned high returns on its investments, the bank could not cover its liabilities and used new CD sales to make interest and redemption payments on pre-existing CDs.
The injunction is a necessary step for Janvey to recoup assets of the alleged Ponzi scheme, the ruling states. Prado added that the lower court was correct to group all of the transactions rather than examining evidence of claims against individuals.
"The receiver's evidence is a spreadsheet ... that lists each former employee, the form of compensation (loan, commission, or quarterly bonus), and the amount that Stanford paid each employee," the ruling states (parentheses in original). "Stanford paid the employee defendants from the alleged Ponzi scheme for the purposes of the preliminary injunction proceeding."
Since Stanford was "grossly undercapitalized" when it entered receivership, Prado added that the interests of the receiver and creditors to achieve some sort of recovery outweigh those of the employee defendants
NEW ORLEANS (CN) - The 5th Circuit refused to thaw the assets of financial advisors and Stanford Group employees who are on trial over their roles in an alleged $8 billion Ponzi scheme.
"The assets that the receiver requests stay frozen are assets that are directly traceable to the Stanford Ponzi scheme and are the subject of this dispute," Judge Edward Prado wrote for the federal appeals panel. "The receiver merely asks that those assets continue to be held immovable while his case proceeds to judgment. We do not find that the district court erred in determining that a preliminary injunction was appropriate to protect against monetary asset dissipation."
The Securities and Exchange Commission sued Stanford Group, along with various other Stanford corporate entities including Stanford International Bank (SIB), in February 2009 for allegedly perpetrating the Ponzi scheme. Two months later, the SEC filed suit again against 66 Stanford "financial advisers."
The district court appointed Robert Janvey as receiver to marshal the Stanford estate, and the 5th Circuit ordered the lower court to thaw the frozen accounts of Stanford investors.
Janvey then obtained a preliminary injunction to continue a freeze on the accounts of numerous former financial advisors and Stanford Group employees pending the outcome of the trial.
The employee defendants asked the 5th Circuit to lift the injunction, which they say should not have been ordered while a motion to compel arbitration was pending. They also claimed the district court abused its discretion in granting the preliminary injunction, that the preliminary injunction was overbroad, that the injunction was really an improper writ of attachment, and that the receiver's claims are subject to arbitration.
The 5th Circuit affirmed the lower court's decision on all issues.
"The receiver is in an unenviable position: although the Stanford estate has many thousands of claimants, there are startlingly few assets to disperse to the Stanford victims," Prado wrote.
The three-judge panel found that the district court had the authority to grant an injunction before deciding the motion to compel arbitration, that it did not "overreach," and that Janvey had enough cause to secure a preliminary injunction." The district court did not err when it found, for the purposes of this preliminary injunction proceeding, that Stanford operated as a Ponzi scheme," Prado wrote.
The SEC claims that the Stanford Group committed the fraud for almost 15 years by selling certificates of deposit (CDs) issued by SIB, promising above-market returns and falsely assuring investors that the CDs were backed by safe, liquid investments.
At the time the SEC filed suit, Stanford should have held assets of greater than $7 billion, but actually held assets of less than $1 billion.
Though SIB claimed that it consistently earned high returns on its investments, the bank could not cover its liabilities and used new CD sales to make interest and redemption payments on pre-existing CDs.
The injunction is a necessary step for Janvey to recoup assets of the alleged Ponzi scheme, the ruling states. Prado added that the lower court was correct to group all of the transactions rather than examining evidence of claims against individuals.
"The receiver's evidence is a spreadsheet ... that lists each former employee, the form of compensation (loan, commission, or quarterly bonus), and the amount that Stanford paid each employee," the ruling states (parentheses in original). "Stanford paid the employee defendants from the alleged Ponzi scheme for the purposes of the preliminary injunction proceeding."
Since Stanford was "grossly undercapitalized" when it entered receivership, Prado added that the interests of the receiver and creditors to achieve some sort of recovery outweigh those of the employee defendants