Las víctimas olvidadas de Stanford ahora disponible en español

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Saturday, March 19, 2011

Congressmen urge SEC to decide Stanford aid issues

Fifty-three members of Congress - including all of Mississippi's - this week asked the Securities and Exchange Commission to prioritize a decision about whether Stanford investment victims qualify for federal assistance.

"We are aware of several issues the SEC staff has raised with respect to whether Stanford victims qualify for SIPC coverage," said the March 16 letter to SEC Chairwoman Mary L. Schapiro.

"The bottom line is that all investors' funds are missing and the SEC failed to act in a timely manner to put an end to Allen Stanford's fraud."

The Securities Investor Protection Corp. is a quasi-public agency that acts like the banks-related Federal Deposit Insurance Corp. to ensure that securities investors are protected, when member funds get into trouble.

Thousands of investors with Stanford Financial Group, which had a Tupelo office, lost their life savings and retirement funds in early 2009 when the Stanford financial empire collapsed under the weight of an SEC investigation.

Subsequently, CEO R. Allen Stanford and four of his top executives were indicted as players in a $7.2 billion Ponzi scheme. They also face civil lawsuits.

The letter's signers include Mississippi Sens. Thad Cochran and Roger Wicker, as well as Reps. Bennie Thompson, Alan Nunnelee, Gregg Harper and Steven Palazzo.

The immediate problem for Stanford investors, officials say, is that SFG was not directly a member of SIPC, although affiliate broker-dealer Stanford Group Co. was.

"These Americans relied on the SEC to uphold its federal mandate to protect investors," the five-page letter states, "and the SEC failed in this regard."

The letter reminds the federal agency that it knew as early as 1997 that Stanford investors were in jeopardy of losing their money, but did not start any official investigation until 2004.

Still, the SEC's financial concerns were not known publicly until 2009, when it was too late for investors to recover their money.

"We urge you to prioritize the determination of whether Stanford victims qualify for SIPC coverage," the U.S. Senate and House members said.

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