Las víctimas olvidadas de Stanford ahora disponible en español

Las víctimas olvidadas de Stanford, ahora disponible en español en:

http://victimasolvidadasdestanford.blogspot.com/

Friday, February 25, 2011

Investors Cite Inattention by Regulators

Blaine Smith, of Baton Rouge, says each new revelation of inattention by state and federal regulators to the dealings of investment promoter Robert Allen Stanford intensifies the pain felt by those who lost their savings to the man.

More than $1 million of Smith’s retirement savings vanished in February 2009, when the U.S. Securities and Exchange Commission alleged that Stanford orchestrated more than $7.2 billion in frauds against more than 25,000 investors across this country and 112 others.

Two years later, the Dallas receiver appointed by a federal judge to find and recover Stanford’s assets for eventual distribution to devastated investors reports that he has only $77.1 million in unrestricted cash.

The receiver, attorney Ralph Janvey, added in his report this month that he actually recovered $188.3 million. But fees and expenses ate up $46.2 million of that total. Another $14.4 million in fees and expenses are subject to court approval for Janvey’s team of lawyers, accountants, investigators and clerical staff.

The first claim against any money that remains in the receivership after fees and expenses is that of the IRS, which wants $226 million for Stanford’s alleged unpaid taxes, penalties and interest.

Smith spent more than 20 years with Exxon and also worked as a homebuilder before Stanford’s chief financial officer, James M. Davis, of Baldwyn, Miss., pleaded guilty to fraud charges and admitted that Stanford’s investments had been a scam.

But Smith’s personal pain increased last year, when the SEC inspector general reported that some of the commission’s regulators concluded in 1997 that Stanford’s operations likely were fraudulent. The IG reported that SEC examiners in Fort Worth asked four times that Stanford be investigated for possible fraud, but their requests were ignored.

Repeatedly, people who lost savings to Stanford have asked the SEC to authorize the Securities Investor Protection Corp. to cover some of their losses. SIPC, created by Congress in 1970, is funded by the financial services industry.

SIPC spread more than $500 million among some of the thousands of people defrauded by confessed swindler Bernard Madoff. To date, however, SIPC coverage has not been extended to Stanford victims.

"Our families are being kicked to the curb in the twilight of our lives," Smith said recently.

Bills to reimburse at least some Stanford investors for some of their losses have been filed in Congress. But none has become law.

Janvey initially attempted to claw back nearly $1 billion that some lucky Stanford investors retrieved in the months before the SEC shut down the man's operations. The receiver took that action against the advice of the SEC, and the 5th U.S. Circuit Court of Appeals eventually ruled Janvey could not retrieve a dime of innocent investors' principal.

Broken investors in other countries are watching this tense tragedy play out in Congress and federal courts.

They're desperate, too. And they hope they won’t be left behind if Congress and the SEC eventually require SIPC to compensate Stanford investors in this country.

Stanford, 60, continues to deny felony charges pending against him in Houston. He continues to ask federal courts to release him from custody. His trial was postponed indefinitely last month after he was discovered to be addicted to anti-depressants. He is under treatment at the Federal Medical Center in Butner, N.C.

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