Las víctimas olvidadas de Stanford ahora disponible en español

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Saturday, July 7, 2012


Stanford Update: July 2012

Dear Stanford Clients: We here at KLS continue our efforts every day to maximize your recovery and hold responsible parties liable for the Stanford Ponzi scheme. We remain confident and focused on the efforts we are taking to obtain a real recovery for Stanford victims. This letter will update you on the status of the various actions we are taking.  

The SEC Lawsuit
In our lawsuit against the SEC, we are waiting on a ruling from the judge on the SEC’s motion to dismiss the case. This is the same status as our last update, and we again will let you know as soon as we have a ruling on the motion. In the meantime, the parties have exchanged initial disclosures identifying various individuals likely to have relevant information about the case. We are also preparing discovery requests to serve on the SEC, including document requests and interrogatories, seeking all available information regarding their investigations of the Stanford entities and their failure to take enforcement action to end the Ponzi scheme. We expect the SEC will oppose responding to any discovery prior to the Court’s ruling on the motion to dismiss, and we may have to file a motion requesting that the Court compel their discovery responses. We will continue to keep you updated on the status of this litigation. Please note that we continue to file claims with the SEC to include as many of you who wish to be included in the class supporting and represented by this lawsuit. Please do not hesitate to contact us individually if you have not yet filed an administrative claim with the SEC through KLS and want to be included.  

The Claims Process
Currently, both the Antiguan Liquidator and the Dallas Receiver have initiated a claims process. There is no coordination between the two processes, and we must file claims in both jurisdictions. For our Stanford Further Actions clients, we have been diligently preparing and filing your claims. You will receive a full copy of your finalized claim when it is filed. We have communicated with a number of you on these claims and will continue to reach out to you in order to finalize your claims. If you have any questions about the claims process, please feel free to contact us.


The Dallas Receivership
The Receiver in Dallas continues to cost the Stanford victims millions of dollars in fees and expenses as his team of attorneys and consultants operate the receivership estate. There are very few assets left for the Receiver to liquidate, and he appears to be focusing solely on his various clawback and fraudulent transfer cases. The Receiver should be able to reach settlements in these actions. However, based on his actions to date, we have very little confidence in him and the team of attorneys he has working for him. We believe the Receiver and his attorneys and consultants value recovering their own fees above any recovery for the victims. We have complained about this to the Court and the Receiver on multiple occasions. We are currently conducting a comprehensive review of all actions taken by the Receiver to determine whether the Receiver should be disgorged of the profits he and his staff earned over the past several years while bringing very little net benefit to the estate.  

Other Potential Lawsuits
We believe there may be potential lawsuits to bring against various banks and financial institutions through which Stanford may have laundered funds. These banks may be liable if they assisted the Stanford Ponzi scheme, whether knowingly or not. In the next few weeks, we will schedule a conference call to discuss these potential actions with you. In particular, we are considering pursuing a case against the Toronto-Dominion Bank based on investor requests. We would like to schedule a call with all of those interested in pursuing such a lawsuit later next week and will send around the call in information and date to those interested in supporting such action on our part.  

Negotiations with Funds to Sell Claims
We have spent several months negotiating with certain hedge funds regarding the potential sale of your claims to a fund for a discounted price. However, prices offered by these funds are a fraction of the price (in the single digits when we believe that a plausible price is 1/3 of the claim amounts or close to that amount) we believe the claims are worth, and we do not believe it is in the best interests of our clients to sell their claims at this price. We believe these funds are playing hardball. We would be happy to sell your claims at the price currently offered, but we do not recommend selling your claims at this price. The negotiations are at a standstill at this point.  

SIPC Coverage
As you may have recently heard, in the lawsuit brought by the SEC against SIPC to compel SIPC coverage, the Court ruled that SIPC cannot be compelled to act. We assume the SEC will appeal this ruling, but for the time being, the prospect of SIPC coverage is dim. It is unfortunate that the Stanford Victims Coalition expended so much time and money on pursuing this.  

Stanford Criminal Conviction
The recent criminal conviction of Allen Stanford should help the government’s claim to recover the $300 million in assets frozen overseas. Currently, the United States and Antiguan governments are fighting for recovery of these funds. We are hopeful that, whichever government prevails, these funds available for distribution. If you have any questions or comments, please contact us.

 Best wishes,

 The KLS Stanford Team.

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