U.S. not liable for alleged SEC negligence in Stanford fraud: court

Allen Stanford (C) leaves the Federal Courthouse where the jury found him guilty, in Houston March 6, 2012

A federal appeals court said on Monday the United States is not liable to victims of Allen Stanford’s fraud who claimed that the Securities and Exchange Commission was incompetent for having taken too long to uncover the swindler’s $7.2 billion Ponzi scheme.

A panel of the 11th U.S. Circuit Court of Appeals in Miami said the government is entitled to sovereign immunity.

Stanford’s victims accused the SEC of negligence for having waited until 2009 to uncover the Ponzi scheme, despite having had evidence of it as early as 1997.

But the court said the SEC had discretion to decide how to enforce securities laws, and could not be liable for certain misrepresentations. It said this justified shielding it from claims raised by the victims under the Federal Tort Claims Act.

“We reach no conclusions as to the SEC’s conduct, or whether the latter’s actions deserve plaintiffs’ condemnation,” Circuit Judge Julie Carnes wrote for a three-judge panel. “We do, however, conclude that the United States is shielded from liability for the SEC’s alleged negligence.”

Victims claimed that the SEC thought Stanford’s business was a fraud after each of four examinations between 1997 and 2004, but failed to advise the Securities Investor Protection Corp, which compensates victims of failed brokerages.

The plaintiffs were led by Carlos Zelaya and George Glantz, who claimed to lose a combined $1.65 million, and sought class-action status. Monday’s decision upheld rulings in 2013 by U.S. District Judge Robert Scola in Miami.

Gaytri Kachroo, a lawyer for the plaintiffs, did not immediately respond to requests for comment.

The U.S. Department of Justice, which represented the SEC in the appeal, did not immediately respond to similar requests.

In 2013, federal appeals courts in New York, Philadelphia and Pasadena, California, dismissed lawsuits accusing the SEC of incompetence in investigating Bernard Madoff.

Stanford, 65, is appealing his March 2012 conviction and 110-year prison term for what prosecutors called a scam centered on his sale of fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank.

The SEC’s inspector general in 2010 criticized the regulator for being too slow to uncover Stanford’s fraud.

The case is Zelaya et al. v. U.S., 11th U.S. Circuit Court of Appeals, No. 13-14780.

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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/




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Allen Stanford receiver’s case against former Lt. Gov. Ben Barnes delayed; settlement talks likely underway

Former Lt. Gov. Ben Barnes was expected to testify later this week at a federal trial in Dallas. That trial has been taken off the calendar as the parties are reportedly deep into settlement talks. Photo of Barnes in his Washington office by Michael A. Lindenberger

The civil case against former Lt. Gov. Ben Barnes was slated to begin today in federal court in Dallas, but it’s been put on hold as attorneys for him and the court-appointed receiver in the Allen Stanford case discuss a settlement.

No settlement papers have been filed with the court, but an attorney for the receiver said this morning the case has been postponed. A clerk in U.S. District Judge David C. Godbey confirmed this morning that the case has been taken off the trial calendar, something she said only happens if settlement talks are very serious. She said the parties called last week to have the case taken off the calendar.

Barnes, 76, was Speaker of the Texas House by the time he was 26, and was lieutenant governor — and arguably the most powerful leader in Texas — before he was 30. LBJ thought he’d be president someday, though those expectations ended after a 1972 bid for governor collapsed. Since then, he’s made millions in real estate, survived an early bankruptcy, and emerged in the past 25 years as one of the state’s leading peddlers of counsel, influence and access. A former director of American Airlines and other large companies, he’s also been a prolific donor to political campaigns. He maintains offices in Austin and in Washington.

But 50 years after fist winning the Speaker’s gavel in 1965, he has for the past year been facing the prospect of a trial in Dallas over more than $5 million in fees paid to his firm by disgraced ex-billionaire Allen Stanford……………….

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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/




Golf Channel Wants Mulligan On $6M Stanford Suit

TGC LLC, doing business as Golf Channel, asked the Fifth Circuit on Wednesday to rehear its decision that the receiver for R. Allen Stanford’s Ponzi scheme could sue the sports channel for about $6 million, arguing that a previous ruling by the appeals court is at odds with the decision.

Golf Channel challenged a March 11 opinion finding that the Stanford receiver could attempt to claw back $5.9 million paid by a Stanford International Bank Ltd. unit as part of a two-year media contract because the…

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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-Related Fraud Class Sees Some Claims Trimmed

A Texas federal judge on Monday trimmed back class claims stemming from Allen Stanford’s $7 billion Ponzi scheme against attorneys and directors accused of aiding and abetting in a breach of fiduciary duty and a fraudulent scheme, among other allegations, saying that some of the claims were time-barred.

The class plaintiffs allege that numerous attorneys and former Stanford executives contributed to the sale of more than $7.2 billion in sham certificates of deposit from the mid 1980s until 2009, but Judge David C. Godbey ruled that…

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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/




Chadbourne, Proskauer Renew Bid For Class Info In Ponzi Suit

Chadbourne & Parke LLP and Proskauer Rose LLP are redoubling their fight for documents in the possession of the receiver for Allen Stanford’s Ponzi scheme that they say will reveal important information about a proposed class of plaintiffs suing the law firms for malpractice.

The two law firms, defendants in a suit brought by victims of Robert Allen Stanford’s $7 billion Ponzi scheme, say receiver Ralph Janvey should have to give them information about who is in the class.

“To date, defendants have received no discovery…

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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/




Client Update March 2015 Zelaya v United States




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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/