Legal Battle over Coverage for the Stanford Antigua Bank Fraud Victims

According to Caribbean 360 and The Gleaner, the U.S. Securities and Exchange Commission (SEC) and the Securities Investor Protection Corporation (SIPC) are heading to court to resolve a dispute involving coverage for thousands of victims of Allen Stanford’s alleged US$7 billion Ponzi scheme. See excerpts with a link to the full articles below:

Stanford, who owned the Antigua-based Stanford International Bank (SIB), is being held in a Houston jail awaiting trial in the alleged scheme that defrauded thousands of investors through high-yield certificates of deposit (CDs) at the SIB. He faces 14 criminal counts related to the investment business. The SEC also has filed a civil suit against him. The new lawsuit seeks reimbursement for customers from Stanford-owned Stanford Financial Group (SFG). [The former Texas financier has denied perpetrating the Ponzi scheme.]

[. . .] The SEC is asking a federal judge to compel the SIPC to cover the losses, which it has staunchly resisted since the 2009 collapse of Stanford Financial. The commission insists that some of Stanford’s victims are entitled to protection under the Securities Investment Protection Act because they were customers of his brokerage firm. However, the SIPC maintains that it can only cover securities, and not certificates of deposit issued by the Antigua-based Stanford International Bank.

Corporation President Stephen Harbeck said, “SIPC is going to defend its statutory program.  Congress did not give us the authority to protect the victims of the Stanford Antigua bank fraud.” In an earlier statement, he described the SEC’s position as unprecedented and warned that this would have serious and far-reaching consequences. [. . .] The lawsuit was filed Monday after the SIPC failed to act on the SEC’s request to initiate liquidation proceeding to recoup some of the funds. Some Stanford investors have welcomed the SEC decision.

For full articles, see http://www.caribbean360.com/index.php/news/523729.html?utm_source=Caribbean360+Newsletters&utm_campaign=889de70e38-12_14_2011&utm_medium=email#axzz1gWLCXTvw and http://jamaica-gleaner.com/gleaner/20111214/business/business5.html

4 thoughts on “Legal Battle over Coverage for the Stanford Antigua Bank Fraud Victims

  1. No reason for most victims to get excited. The SEC is only looking out for AMERICAN VICTIMS to get SIPC, they could not give a fig about the rest of the victims worldwide. If SIPC is paid International Victims will find themselves in a detrimental position as SIPC will take any money the receiver has in his accounts to pay for whatever it costs them to bail out the AMERICANS!!
    An AMERICAN(Stanford) caused this, an AMERICAN institute (SEC) sat by and watched it happen without stepping in, AMERICAN Politicians pocketed money that Stanford stole from his clients and gave to them as “contributions” (which incidentally most politicians refuse to pay back) and now the AMERICANS are throwing the majority of victims to the wolf while they try and take control of the small amount of money that has been found for themselves.They must feel so proud of themselves…NOT!!

  2. Since it was an Antiguan Bank (owned by an Antiguan “Knight”), the Antiguan government should pay up for ALL victims, like the FDIC would for an American bank.

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