Posts tagged ‘stanford group CD fraud’
SEC sues SIPC over Stanford Investment Fraud Victim Coverage
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.
SIPC at Odds with SEC over Stanford Ponzi Scheme Victim Compensation
In a recent blog post (http://www.whitesecuritieslaw.com/2011/11/17/recovery-of-stanford-group-investment-losses-through-finra-arbitration/), we gave an update on the potential for recovery for investors who bought fraudulent Certificate of Deposit (CD) investments from R. Allen Stanford’s Stanford Group Co. Our firm is investigating the potential for recovery of investment losses though FINRA arbitration in claims against the financial professionals that sold the investments.
Additionally, investors have 2 other main avenues through which they are hoping for recovery. The first is through the court ordered receivership and the second through the SIPC. The Securities Investor Protection Corporation (SIPC) can offer up to $500,000 in coverage to accounts with member firms. The SIPC initially denied coverage to investors who purchased CD’s from Stanford, but in June the SEC urged them to reconsider and threatened legal action.
The SIPC has remained largely silent since they promised to reconsider the SEC’s request during a board meeting in September. However, CNBC is now reporting that in a recent letter to Congress, the SIPC continues to contend that they are not responsible for the Stanford accounts.
Investors and the SEC believe that the SIPC should cover the losses because, “…most of the CDs were purchased through Stanford’s U.S. broker-dealer, a SIPC member.” According to CNBC, The SIPC told congress that “providing the coverage would be ‘unprecedented,’ because the investors ‘chose to purchase CDs issued by an offshore bank in Antigua,’ which is not covered by SIPC.” The letter also stated that there is “fundamental disagreement” between themselves and the SEC on this matter.
The SIPC and the SEC are apparently engaging in private discussion about the Stanford issue which CNBC said is “apparently are aimed at settlement to avert a lawsuit by offering a partial payout to investors.” CNBC also reported that both some members of Congress and investors may push the SEC to take legal action for full coverage sooner than later, while securities industry trade group, SIFMA, has made statements that it agrees with the SIPC that they are not responsible for covering the fraud losses.
The White Law Group will continue to carefully monitor this situation and how it impacts investors. If you invested in a Stanford Certificate of Deposit (CD) investment and would like to speak to a securities attorney about your potential to recovery investment losses through a FINRA dispute resolution claim 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.
Recovery of Stanford Group Investment Losses through FINRA Arbitration
Investors who purchased Certificate of Deposit (CD) Investments from R. Allen Stanford’s Stanford Group Co. have struggled for nearly 3 years with the question of if, when and how much of their investment losses they may recover. Most investors are focused on recovering money from the receivership and hoping the SIPC will decide to insure investor losses. However, there is a third way to pursue some of the remaining losses investors may not recover through these other 2 avenues, FINRA Arbitration.
Just this week, according to foxbusiness.com, “…the court-appointed receiver for Stanford’s firm, asked a federal judge in Houston for permission to set up a claims process.” However, the article also stated, “It is unclear how much money will be distributed, when payouts will begin, and how such amounts will be calculated.”
The SIPC is also supposed to be deliberating on whether to cover damaged Stanford investors. After initially stating that they would not cover Stanford victims, the SEC urged them to reconsider in June and in September the SIPC met to discuss the issue again. They have not said anything since their September meeting and it is unclear when, how much money or if damaged investors may receive compensation from the SIPC. The SIPC can cover insured investors up to $500,000.
It is still uncertain how much of their lost Stanford Group CD investments investors will receive from the receivership or the SIPC. The White Law Group may be able to help investors seek to recover the balance of their investment through a FINRA dispute resolution claim. Filing a FINRA arbitration claim and any award received does not preclude investors from receiving money from the receiver or SIPC, but may help to make up the difference between total investment losses and money received from the receivership and the SIPC.
Many of the brokers that worked at the Stanford Group Co. and sold the Certificate of Deposit (CD) investments that are at the center of the alleged ponzi scheme have moved on to other FINRA registered broker dealers. It has been reported that these brokers received relatively large commissions for the sale of the CD’s while they were at Stanford and may have some liability for investor losses.
Financial professionals and brokerage firms have a fiduciary duty to perform due diligence on any investment and to insure that an investment is appropriate in light of the investor’s age, investment experience, and investment objectives.
If you would like to speak to a securities attorney about your investment in a Stanford Group CD investment and your potential to recover some of your 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.