Summary: After Allen Stanford’s billion dollar Ponzi scheme was uncovered in 2009, investors are finally getting some of their money back.
Victims of Texas financier Allen Stanford are finally seeing compensation from his Ponzi scheme. The law firm that once represented the now-imprisoned Stanford reached a settlement for $35 million with the victims. The Ponzi scheme is estimated to have been worth $7.2 billion.
Read Prosecutors Want 230 Years for Allen Stanford – Defense wants 44 months to learn more.
Chadbourne & Parke and Proskauer Rose reached the settlement despite a federal appeals court determining they were immune under Texas law from any liability from the scheme. Around 18,000 former investors of Stanford sued the two law firms for the work swindler Thomas Sjoblom did. Sjoblom was a lawyer at both law firms.
Read Supreme Court to Hear Appeals of Chadbourne & Parke and Proskauer Rose in Allen Stanford Matter.
The claim by the investors was that the law firms ignored Stanford’s sale of high-yield certificates of deposit that went through his Antigua-based Stanford International Bank. The certificates were fraudulent. They also claim the firms obstructed an investigation by the U.S. Securities and Exchange Commission into the activity.
Stanford is serving a 110 year prison sentence after being found guilty of fraud four years ago. The scheme was discovered in 2009.
See Lawyers for R. Allen Stanford Request Withdrawal from Case.
Chadbourne is not admitting any wrongdoing with the settlement, which must still be approved by U.S. District Judge David Godbey in Dallas, Texas. The settlement resolves claims by Ralph Janvey, a court-appointed receiver by Stanford’s companies and an investors committee to recover money for the creditors. Godbey dismissed other claims brought by the investors against former Stanford general counsel Mauricio Alvarado.
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