{"id":5272,"date":"2012-02-10T00:00:00","date_gmt":"2012-02-10T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/02\/sec_gets_initial_victory_in_la"},"modified":"2022-04-22T11:00:15","modified_gmt":"2022-04-22T16:00:15","slug":"sec-gets-initial-victory-in-la","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/","title":{"rendered":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors"},"content":{"rendered":"<p>U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make the Securities Investor Protection Corp. start liquidation proceedings to compensate the victims of Allen Stanford\u2019s $7B Ponzi scam for their losses. This ruling is a partial victory for the SEC, which has been trying to get the brokerage industry-funded nonprofit to help the investors recoup their losses. The dispute between the two groups has centered around the interpretation of the SIPC\u2019s mission and whether or not it supports the SEC\u2019s efforts to protect investors.<\/p>\n<p>SIPC had been pushing for a trial. However, Wilkins said that a trial doesn\u2019t comport with the agency\u2019s purpose, which is to give immediate, summary proceedings upon the failure of a securities firm. Wilkins is mandating a \u201csummary proceeding\u201d that would be fully briefed by the end of this month. However, in regards to the SEC claim that it should be able to determine when the SIPC has failed to fulfill its duties, Wilkins said that this was for the court to decide.<\/p>\n<p>SIPC has a reserve fund that is there to compensate investors that have suffered losses because a brokerage firm has failed. Under SIPC protections, customers of a broker that has failed can receive up to $500,000 in compensation ($250,000 in cash). Although not intended as insurance against fraud, SPIC covers the financial firm\u2019s clients but not those that worked with an affiliate, such as an offshore bank. For example, Stanford International Bank is an Antiguan bank, which means that it should fall outside SIPC-provided protections. However, Stanford Group Company, which promoted the CDs to the investors, is a member of SIPC. (Also, SEC has maintained that Stanford stole from the brokerage firms\u2019 clients by selling the CDs, which had no value, and that this was not unlike the Bernard L. Madoff Ponzi scam that credited $64B in fake securities to client accounts.)<\/p>\n<p>Meantime, Stanford has been charged by both federal prosecutors and the Commission with bilking investors when he and his team persuaded them to buy $7B in bogus CDs from Stanford International Bank. He then allegedly took billions of those dollars and invested the cash in his businesses and to support his lavish lifestyle. Stanford\u2019s criminal trial is currently underway.<\/p>\n<p>Wilkins noted that even if the SEC\u2019s lawsuit against SIPC succeeds, this wouldn\u2019t mean that Stanford\u2019s victims would get their money right away. It would still be up to a Texas court to decide on claims filed by former Stanford clients.<\/p>\n<p><a href=\"https:\/\/www.wsj.com\/articles\/SB10001424052970203646004577213910430508768\">Judge Hands SEC Initial Victory In Suit Against Insurance Fund<\/a>, The Wall Street Journal, February 9, 2012<\/p>\n<p><a href=\"https:\/\/www.sipc.org\/\">Securities Investor Protection Corporation<\/a><br \/>\n<a href=\"https:\/\/dealbook.nytimes.com\/2011\/06\/20\/compensating-stanfords-investors\/\">Compensating Stanford\u2019s Investors<\/a>, NY Times, June 20, 2011<\/p>\n<p><strong><br \/>\nMore Blog Posts:<\/strong><br \/>\n<a href=\"https:\/\/www.investorlawyers.com\/blog\/2012\/02\/sec_and_sipc_go_to\">SEC and SIPC Go to Court to Over Whether SIPA Protects Stanford Ponzi Fraud Investors,<\/a> Stockbroker Fraud Blog, February 6, 2012<\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2011\/12\/sec_sues_sipc_over_r_allen_sta\">SEC Sues SIPC Over R. Allen Stanford Ponzi Payouts<\/a>, Stockbroker Fraud Blog, December 20, 2011<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/#more-5272\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make the Securities Investor Protection Corp. start liquidation proceedings to compensate the victims of Allen Stanford\u2019s $7B Ponzi scam for their losses. This ruling is a partial victory for the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3792,3761],"tags":[2529],"class_list":["post-5272","post","type-post","status-publish","format-standard","hentry","category-ponzi-scams","category-securities-and-exchange-commis","tag-sipc"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors &#8212; Investor Lawyers Blog &#8212; February 10, 2012<\/title>\n<meta name=\"description\" content=\"U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make &#8212; February 10, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors &#8212; Investor Lawyers Blog &#8212; February 10, 2012\" \/>\n<meta name=\"twitter:description\" content=\"U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make &#8212; February 10, 2012\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors &#8212; Investor Lawyers Blog &#8212; February 10, 2012","description":"U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make &#8212; February 10, 2012","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/","twitter_card":"summary_large_image","twitter_title":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors &#8212; Investor Lawyers Blog &#8212; February 10, 2012","twitter_description":"U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make &#8212; February 10, 2012","twitter_misc":{"Written by":"Shepherd Smith Edwards &amp; Kantas, LLP","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/#article","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/"},"author":{"name":"Shepherd Smith Edwards &amp; Kantas, LLP","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"headline":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors","datePublished":"2012-02-10T06:00:00+00:00","dateModified":"2022-04-22T16:00:15+00:00","mainEntityOfPage":{"@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/"},"wordCount":554,"keywords":["SIPC"],"articleSection":["Ponzi Scams","Securities and Exchange Commission"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/","url":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/","name":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors &#8212; Investor Lawyers Blog &#8212; February 10, 2012","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#website"},"datePublished":"2012-02-10T06:00:00+00:00","dateModified":"2022-04-22T16:00:15+00:00","author":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"description":"U.S. District Court Judge Robert Wilkins says that the Securities and Exchange Commission doesn\u2019t need to go through a full civil trial in order to make &#8212; February 10, 2012","breadcrumb":{"@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.investorlawyers.com\/blog\/sec-gets-initial-victory-in-la\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.investorlawyers.com\/blog\/"},{"@type":"ListItem","position":2,"name":"SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors"}]},{"@type":"WebSite","@id":"https:\/\/www.investorlawyers.com\/blog\/#website","url":"https:\/\/www.investorlawyers.com\/blog\/","name":"Investor Lawyers Blog","description":"Published By Investment Fraud Attorneys \u2014 Shepherd Smith Edwards &amp; Kantas, LLP","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.investorlawyers.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431","name":"Shepherd Smith Edwards &amp; Kantas, LLP","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","caption":"Shepherd Smith Edwards &amp; Kantas, LLP"},"sameAs":["https:\/\/www.investorlawyers.com\/"]}]}},"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pedX9K-1n2","_links":{"self":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=5272"}],"version-history":[{"count":4,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5272\/revisions"}],"predecessor-version":[{"id":26767,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5272\/revisions\/26767"}],"wp:attachment":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=5272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=5272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=5272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}