For years, investors in R. Allen Stanford’s $7 billion Ponzi scheme have been struggling to eke out any significant recoveries. But things are looking up for Stanford’s 21,000 global investors, not to mention for the lawyers representing them on a contingency basis.
Unable to knock out a series of investor suits, four banks and four former law firms that serviced Stanford’s business empire are increasingly feeling the pressure from plaintiffs asserting billions of dollars in claims. As the defendants fight to overturn their courtroom losses—and to find out if they must face the plaintiffs as a class—counsel for the investors are now enjoying the advantage.
In early 2012, three years after the Stanford fraud was exposed, the investors’ position appeared far weaker. Court-appointed Stanford receiver Ralph Janvey and his counsel at Baker Botts had recovered just 3 cents for each dollar lost, with nearly half going toward professional fees. By contrast, in his first two years on the job, Irving Picard, the liquidation trustee for Bernard L. Madoff Investment Securities, had already recovered $7.2 billion from the widow of Madoff investor Jeffry Picower, and $3 billion from others.
“We never had a Mrs. Picower,” said Butzel Long partner Peter Morgenstern, cocounsel in a Stanford investor class action against TD Bank, HSBC, Societe General and two smaller Texas banks that collectively processed billions of dollars of transactions for Stanford’s sham businesses.
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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/