Las víctimas olvidadas de Stanford ahora disponible en español

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

http://victimasolvidadasdestanford.blogspot.com/

Tuesday, April 8, 2014

Claw Backs Sought From 329 Brokers Who Worked For Ponzi Schemer

The court-appointed receiver for the defunct Stanford Financial Group has asked the U.S. Supreme Court for help in clawing back money from brokers who worked at the firm.

 The receiver, Ralph Janvey, has been pursuing 329 former Stanford Financial brokers for a total of $215 million in commissions and recruitment bonuses that the brokers got from Stanford Financial.

 Janvey contends the money was derived from the fraudulent sales of CDs and has to be returned.

 Allen Stanford, founder of the firm, was convicted in 2012 on 13 fraud counts involving the loss of $7 billion in investor funds through sales of the CDs.

 The former Stanford brokers have so far forestalled the receiver’s court claim against them, arguing that Janvey must pursue each broker individually in arbitration hearings. The brokers say Stanford agreed to arbitrate disputes.

 Last August, Janvey lost a critical case before the U.S. Circuit Court of Appeals in New Orleans, which ruled that he could only pursue claims on behalf of the various Stanford companies, not investors or other Stanford creditors.

 If upheld, the ruling will likely force Janvey to pursue the brokers in Finra-run arbitrations, which could make recovery more difficult.

 In January, Janvey asked the Supreme Court to hear the issue and allow him to represent Stanford investors and other creditors of Stanford.

 The Stanford brokers are opposing the receiver’s petition to the high court. Janvey’s “argument is fundamentally flawed,” the brokers said in a March filing with the Supreme Court, citing what they claim is “an unbroken line of [legal] authority dating back 75 years.”

 Janvey simply wants to avoid arbitration, said Bradley Foster, a lawyer at Andrews Kurth LLP in Dallas, who represents 115 of the brokers.

 “What’s really at stake is the extent to which we are stuck with contracts signed by a Ponzi schemer,” countered Kevin Sadler, a partner at Baker Botts who represents the Stanford receiver. “In our view the receiver is not bound by those [arbitration agreements] and is free to pursue litigation.”

 Separately, the trustee overseeing the Madoff case has also asked the Supreme Court to decide a similar issue about how much power the trustee has to sue third parties.

 The Madoff trustee, Irving Picard, acting on behalf of the SIPC, wants to pursue claims against several big brokerage firms and feeder funds that he claims contributed to the fraud. But a federal appeals court ruling last June limited Picard’s asset recovery to just the Madoff brokerage firm and Madoff’s estate.

 Picard petitioned the high court to hear the case last October, and in January, the court asked the U.S. Solicitor General for an opinion on issues raised in the Madoff case. “It is fortuitous that the same issue has arisen in both the [Stanford] receivership and [Madoff] bankruptcy contexts at roughly the same time, and that this Court may consider and resolve them in tandem,” Janvey told the Supreme Court.

 A decision by the Supreme Court on whether to take up the cases could come within the next few months. 

Due to the nature and complexity of the Stanford fraud, recoveries so far have been minimal. Janvey’s lawsuits against various outside parties like the former Stanford brokers had as of February netted only about $21 million.

 All told, Janvey seeks recovery of $686 million from defendants like the Stanford brokers.

“Asset recovery litigation is difficult, protracted, and expensive,” Janvey wrote in a January update. “Nevertheless, such claims are the single largest potential source of funds which may be recovered for the benefit of Stanford’s victims.”

 Janvey, who has been criticized for spending about half the $263 million he’s recovered so far, told CNBC in March that the ultimate payouts to defrauded

Stanford investors will end up being just “pennies on the dollar.” Stanford was a large firm and costly to close down, Sadler said, and “most of the money was gone” by the time the receiver was appointed.

To join the debate click here. 

For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/



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