The White Law Group is closely monitoring the ability for investment fraud victims of R. Allen Stanford and Stanford Group Co.’s alleged investment scheme to recover their losses resulting from the purchase of Certificate of Deposit (CD) investments. Just days ago, we wrote that the SIPC told Congress in a letter that they continued to maintain that they were not responsible to pay out to investors even though Stanford’s brokerage firm was a member of the SIPC (http://www.whitesecuritieslaw.com/2011/12/07/sipc-at-odds-with-sec-over-stanford-ponzi-scheme-victim-compensation/).
The SIPC argues that since the CD investments were issued from an offshore bank, the investors are not eligible for the up to $500,000 SIPC coverage. Members of Congress and investors urged the SEC to take strong action against the SIPC as opposed to brokering a settlement. This week, the SEC took that action by filing documents in federal court seeking to require the SIPC to cover the victims of the alleged Stanford Ponzi Scheme.
According to the investmentnews.com, the SEC contends that they have authority to decide if investors should be covered. The SIPC strongly disagrees and is prepared to fight the SEC’s position in court. President of the SIPC, Steve Harbeck, was quoted as saying, “Given the diametrically opposed positions of the SEC and SIPC, this matter is going to have to be resolved in the courts.”
Investors will have to keep a close eye on the federal court proceedings to see if they will be collecting a portion of their losses from the SIPC. While they wait on the court’s decision, investors are also continuing to pursue recovery through the court appointed receivership which is moving forward with their claims process.
Finally, investors may be able to pursue recovery through one other avenue while they wait on the SIPC and the receivership, FINRA arbitration. If the financial advisor that sold investors their Stanford CD’s is still registered with a FINRA member firm, investors may be able to recover their losses in a claim against their financial advisor through FINRA dispute resolution. To speak to a securities attorney about your ability to recover your Stanford CD investments losses through FINRA arbitration please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.