Enter your email address and start getting breaking law firm and legal news right now!
Stanford’s Ponzi Scheme Victims to Receive $55 Million – A Penny for the Dollar
According to a plan submitted by the receiver, the roughly 18,000 investors defrauded by Allen Stanford’s $7 billion Ponzi scheme would receive an initial payment of $55 million. However, advocate groups of victims criticized the plan holding that the fees already involved in collecting the money was grossly disproportionate to the payout.
In a statement issued by the Stanford Victims Coalition, the group’s director, Angela Shaw, said, “To say the recovery of one penny on the dollar is disappointing is a dramatic overstatement.”
However, the receiver wrote that, “Many of these people entrusted their entire life savings to the scheme and have received a pittance or nothing at all from it” and he wanted to start the ball rolling.
Allen Stanford was sentenced last year to 110 years in prison over the Ponzi scheme he ran from his bank based in Antigua, the Stanford International Bank.
Action in the Stanford Ponzi case has been delayed owing to the fact that until now, the Securities Investor Protection Corp, the industry backed fund which handled such high-profile scams, including the Madoff Ponzi scheme, has refused to be involved.
An exchange by the Securities and Exchange Commission for SIPC to involve itself in the Stanford matter and help further compensate the victims has been refused by a federal judge on the grounds that the SEC had failed to show why the SIPC should act. On its side, the SIPC has refused involvement claiming that Stanford’s scheme was based offshore and hence the scheme was outside its scope.
The case in U.S. District Court, Northern District of Texas is Securities and Exchange Commission vs. Stanford International Bank Ltd et al, 09-cv-0298.Stanford’s Ponzi Scheme Victims to Receive $55 Million – A Penny for the Dollar by Scott