$27M In Attys’ Fees OK’d In Stanford Bank Ponzi Scheme Deal

A Texas federal judge approved nearly $27 million in attorneys’ fees on Wednesday as part of a nearly $133 million Stanford Ponzi scheme settlement that he said also merited approval despite objections.

U.S. District Judge David Godbey approved the full amount of the of $26,787,500 request for attorneys’ fees from firms, including Castillo Snyder and Strasburger & Price, that worked on the $132.5 million settlement with the so-called Willis defendants and BMB defendants over their roles in making R. Allen Stanford’s Ponzi scheme seem low-risk and…

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BDO settles Stanford litigation for $40M

BDO USA LLP, one of the world’s largest accounting firms, has agreed to pay $40 million to settle claims brought by thousands of investors who lost money in R. Allen Stanford’s Ponzi scheme.

Lawyers for the receiver appointed to recover money lost in the $7 billion international fraud scheme and attorneys for about 20,000 investors, many of whom lost their life savings, disclosed the settlement Friday in a Dallas federal court filing. They asked the court to approve the deal.

“It’s really the first significant settlement for the victims after six years,” said Edward Valdespino, a lawyer with San Antonio’s Strasburger & Price LLP, one of the law firms representing investors. Before this settlement, he believes the biggest award for victims had been about $5 million.

BDO made no admission of wrongdoing in the settlement. In a statement, it said the settlement made the most sense given its insurance coverage and the costs associated with litigation……………
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Receiver in Ponzi Case Can’t Sue Law Firm

WASHINGTON (CN) – The court-appointed receiver for R. Allen Stanford’s $7 billion Ponzi scheme cannot sue Proskauer Rose and Chadbourne & Parke in D.C. federal court because it lacks jurisdiction, the D.C. Circuit ruled.

Janvey sued the law firms and attorney Thomas V. Sjoblom, of Virginia, in January 2012 for breach of fiduciary duty, accusing the lawyers of helping the Stanford Investment Bank evade government oversight and investigation.

Sjoblom was a partner at Chadbourne from 2002 to 2006 and a partner at Proskauer from 2006 to 2009, Janvey alleged in a similar suit against the defendants filed in February 2013 in Dallas federal court.

Janvey’s D.C. suit was transferred to Dallas federal in March 2012. The trial court later denied the defendants’ motion to dismiss in August 2013, resulting in the case being remanded back to D.C. federal court four months later by the U.S. Judicial Panel on Multidistrict Litigation. The panel agreed with the trial court’s determination that the D.C. Court should decide if a transfer to Dallas federal court would be “in the interest of justice.”

On July 24, the D.C. Circuit concluded it is not in the interest of justice to transfer the suit back to Dallas federal court. Writing for the court, Judge Colleen Kollar-Kotelly said both parties concede some of the defendants are “stateless” for purposes of diversity jurisdiction, which creates a “special problem.”

“Two of the defendants are law firms with partners who are American citizens domiciled abroad,” the 12-page opinion stated. “The Supreme Court has held that the citizenship of a partnership for the purposes of establishing diversity jurisdiction ‘depends on the citizenship of all members.'”

Kollar-Kotelly notes the plaintiffs are not pro se litigants. She is not convinced they “were simply confused as to the proper forum” to file their lawsuit.

“Rather, plaintiffs are represented by two law firms, Strasburger & Price LLP and Neligan Foley LLP,” the opinion stated. “Nor have plaintiffs alleged that there were complex or novel jurisdictional provisions at issue excusing their failure to file this action in the proper court. Instead, plaintiffs’ failure to recognize the District of Columbia District Court lacked jurisdiction over their lawsuit suggests that plaintiffs filed their suit in this jurisdiction either in bad faith and/or as an attempt at forum shopping.”

Proskauer did not immediately respond to a request for comment Tuesday.

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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/