Freitag, 10. Februar 2012

Judge Hands SEC Initial Victory in Suit Against Insurance Fund

February 10, 2012
By ANDREW ACKERMAN
A federal judge Thursday handed the Securities and Exchange Commission a partial victory in its suit against an agency that insures U.S. brokerage accounts to force it to pay investors in R. Allen Stanford's alleged $7 billion Ponzi scheme.

U.S. District Court Judge Robert Wilkins ruled the SEC didn't need to go through a full-fledge civil trial to force the Securities Investor Protection Corp. to start a liquidation proceeding to begin compensating Mr. Stanford's victims.

Judge Wilkins ruled that a trial, which SIPC sought, didn't comport with the agency's purpose of providing "prompt, summary proceedings" when a securities firms fails. Instead, he ordered a "summary proceeding," that would be fully briefed by the end of February.

But it wasn't a total legal victory for the SEC. The agency had essentially argued that it could determine on its own if SIPC had failed in its responsibilities. "This contention is untenable," Judge Wilkins wrote. "This determination must be made by the court, not unilaterally by the SEC."

In a statement, SEC Chief Litigation Counsel Matthew Martens said the agency is pleased with the judge's decision to expedite the case in lieu of "full-blown litigation that could drag on for years and greatly delay relief to the Stanford investors."

"We look forward to a prompt resolution of this important matter so that claimants can have the chance to seek judicial review of their claims," he said.

A spokesmen for SIPC couldn't be reached for comment.

Federal prosecutors and the SEC charged Mr. Stanford in 2009 with fabricating high returns to lure investors around the world to buy about $7 billion of fictitious certificates of deposit from Stanford International Bank Ltd. in Antigua, the island where he was knighted. Mr. Stanford is alleged to have misappropriated billions of dollars of investor money and invested an undetermined amount in unprofitable private businesses he controlled. He has denied the charges and his trial began last month.

The SEC filed its lawsuit against SIPC in December, after negotiations between the two agencies reached an impasse on the Stanford matter. It is the SEC's first lawsuit against SIPC in the insurance fund's 42-year history.

The dispute hinges on how SIPC's mission is interpreted and builds on the SEC's bid to protect investors more aggressively in the wake of several high-profile missed cases. SIPC maintains a special reserve fund authorized by Congress to compensate investors who lose money in failed brokerage firms.

The SEC, several lawmakers and numerous Stanford customers contend SIPC should use its powers to help Mr. Stanford's alleged victims. SIPC says it can't do so because Mr. Stanford's alleged victims didn't lose money in a failed brokerage firm; they bought CDs issued by a bank and continue to hold those assets, even if they are worthless.

The SEC said in June that it disagrees with SIPC's stance and authorized the lawsuit if SIPC didn't begin a liquidation of Stanford Group, a U.S.-based broker-dealer through which Mr. Stanford sold the certificates to American investors.

Roughly 7,800 people bought their CDs through Stanford Group, which is a SIPC member, according to estimates by the court-appointed receiver in the case, Ralph Janvey. In its June analysis, the SEC argued that SIPC's position elevates form over substance and ignores the fact that Stanford allegedly structured the various entities of his financial empire principally to carry out a single fraudulent Ponzi scheme.

Even if the SEC ultimately prevails in its suit against SIPC, Judge Wilkins signaled Thursday it wouldn't immediately lead to relief for Mr. Stanford's victims. A Texas court overseeing Mr. Janvey would ultimately decide on the merits of any claims filed by former customers, Judge Wilkins said.
You can find here the complete information in pdf file:

Judge Wilkins Opinion regarding SEC SIPC Order.

Order to SIPC to Show Cause.

Read more: http://sivg.org/article/2012_Judge_Initial_Victory_Against_SIPC.html


Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

All victims should be entitled to the protections of the SIPA

February 10, 2012
By SIVG
LETTER TO THE HONORABLE JUDGE ROBERT L. WILKINS

The Honorable Judge
Robert L. Wilkins
US District Court for the District of Columbia
333 Constitution Avenue NW
Washington D.C. 20001
The United States of America

Ref. - SEC v SiPC (Case No.: 1:11-mc-00678-RLW)

Honorable Judge Wilkins:

The undersigned, non-US citizens, victims of the Stanford Ponzi scheme, very respectfully address this urgent letter to you, accompanied by evidences that we have collected with regard to marketing materials of the Stanford International Bank as well as other Stanford entities, which were used in the scam for sale of CDs by most financial advisors involved in this terrible crime defrauding thousands of people worldwide.

Stanford's victims are predominantly people who invested their life savings in the Stanford entities because they trusted U.S. legal regulations which seemed to support the Stanford businesses. Stanford's marketing portfolio generally included publications with the SEC, FiNRA and SiPC logos on.

The companies controlled and directly or indirectly owned by Allen Stanford operated in a highly interconnected fashion to advance the selling of SiBL CDs. In addition, Stanford's financial advisors relied on the apparent legitimacy offered by US regulation of Stanford's US brokerage subsidiary (SGC) in order to generate sales of SiBL CDs. Likewise, in order to buy CDs through the Stanford Financial Group of Companies (SFG), a global network of financial services companies based in Houston, Texas, innocent investors from different places and countries were made to submit an account application that bore the SiB logo and indicated that customers were entering into an agreement with SGC, an NASD/FiNRA and member of SiPC.

On the other hand, the SEC has alleged in its civil suit against Stanford et al., that, the SFG of Companies operated a massive Ponzi scheme; and, an entity that operates as a Ponzi scheme is a matter of law. Therefore, any insolvent entity cannot issue real securities and, the SiPC/SiPA has previously been used --Old Naples Securities-- to protect investors regardless of the fact that the securities were fictitious, as in the case of SiBL CDs.

Judge Wilkins, if the SiBL CDs had no value due to the fact that most of the money was stolen in a Ponzi scheme, then the SiBL CDs cannot be replaced, can they? Therefore, when missing securities cannot be replaced by SiPC, a client of the bank is entitled to compensation of his/her net equity investments; this is the CDs in our case. Besides, all victims' life savings were stolen by NASD/FiNRA-registered financial advisors, members of SiPC, mostly vice-presidents, as official representatives not only for the SGC, but also for the conglomerate of entities of the SFG, including the SiBL and the STCL in Antigua.

Finally, it is well documented that during more than a decade, Stanford Financial had printed and distributed to its Financial Advisors thousands of brochures offering SiBL CDs. Additionally, Stanford Financial launched an intensive TV advertising campaign in The United States to promote the sale of SiBL CDs. By 2008, Stanford Financial had distributed nearly 6,000 SiBL CD "Accredited Investor" packets to investors under the Reg. D offering.

With all due respect, the Stanford International Victims present the attached evidences to you, which we hope be considered in Court for the current litigation SEC v. SiPC.

Very truly yours,
The Stanford International Victims Group

February the 9th, 2012
Contact us at: www.sivg.org
The following business cards show "different company's name" having the same Stanford logo/name, and the same Email-Domain "stanfordeagle.com". More Evidences.
Here is the letter delivered to Honorable Judge Wilkins, received and sealed by the US District Court.

LETTER TO Dr. BILL CASSIDY

Mr. Representative
Dr. BILL CASSIDY
Washington DC Office
1535 Longworth HOB
Washington, D.C. 20515
The United States of America

Ref. - SEC v SiPC (Case No.: 1:11-mc-00678-RLW)

Distinguished Dr. Cassidy:

The undersigned, non-US citizens, victims of the Stanford Ponzi scheme, very respectfully address this urgent letter to you, accompanied by evidences that we have collected with regard to marketing materials of the Stanford International Bank as well as other Stanford entities, which were used in the scam for sale of CDs by most financial advisors involved in this terrible crime defrauding thousands of people worldwide.

Stanford's victims are predominantly people who invested their life savings in the Stanford entities because they trusted U.S. legal regulations which seemed to support the Stanford businesses. Stanford's marketing portfolio generally included publications with the SEC, FiNRA and SiPC logos on.

The companies controlled and directly or indirectly owned by Allen Stanford operated in a highly interconnected fashion to advance the selling of SiBL CDs. In addition, Stanford's financial advisors relied on the apparent legitimacy offered by US regulation of Stanford's US brokerage subsidiary (SGC) in order to generate sales of SiBL CDs. Likewise, in order to buy CDs through the Stanford Financial Group of Companies (SFG), a global network of financial services companies based in Houston, Texas, innocent investors from different places and countries were made to submit an account application that bore the SiB logo and indicated that customers were entering into an agreement with SGC, an NASD/FiNRA and member of SiPC.

On the other hand, the SEC has alleged in its civil suit against Stanford et al., that, the SFG of Companies operated a massive Ponzi scheme; and, an entity that operates as a Ponzi scheme is a matter of law. Therefore, any insolvent entity cannot issue real securities and, the SiPC/SiPA has previously been used --Old Naples Securities-- to protect investors regardless of the fact that the securities were fictitious, as in the case of SiBL CDs.

Dr. Cassidy, if the SiBL CDs had no value due to the fact that most of the money was stolen in a Ponzi scheme, then the SiBL CDs cannot be replaced, can they? Therefore, when missing securities cannot be replaced by SiPC, a client of the bank is entitled to compensation of his/her net equity investments; this is the CDs in our case. Besides, all victims' life savings were stolen by NASD/FiNRA-registered financial advisors, members of SiPC, mostly vice-presidents, as official representatives not only for the SGC, but also for the conglomerate of entities of the SFG, including the SiBL and the STCL in Antigua.

Finally, it is well documented that during more than a decade, Stanford Financial had printed and distributed to its Financial Advisors thousands of brochures offering SiBL CDs. Additionally, Stanford Financial launched an intensive TV advertising campaign in The United States to promote the sale of SiBL CDs. By 2008, Stanford Financial had distributed nearly 6,000 SiBL CD "Accredited Investor" packets to investors under the Reg. D offering.

With all due respect, the Stanford International Victims present the attached evidences to you, which we hope be considered in your plans to file legislation to allow investors of R. Allen Stanford to individually opt out of a federal lawsuit for one-time buyouts of up to $500,000. Improving SiPC Act of 2012 legislation is firmly related to current litigation SEC v. SiPC.

Very truly yours,
The Stanford International Victims Group

February the 9th, 2012
Contact us at: www.sivg.org
The following business cards show "different company's name" having the same Stanford logo/name, and the same Email-Domain "stanfordeagle.com". More Evidences.

Read more: http://sivg.org/article/2012_Victims_protections_SIPA.html


Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Donnerstag, 9. Februar 2012

Cassidy and Deutch Introduce Improving SIPC Act of 2012

February 9, 2012
Today, Congressman Bill Cassidy, M.D. (R-LA) and Congressman Ted Deutch (D-FL) introduced the Improving Security for Investors and Providing Closure Act, or Improving SIPC Act of 2012. The legislation seeks to provide victims of Ponzi Schemes, including ones similar to the scheme carried out by R. Allen Stanford, with a quicker path to a financial resolution. No taxpayer money will be required to fund this legislation and no increase to the national debt will be incurred if it is enacted.

Late last year SIPC made a settlement offer to the SEC to satisfy the claims of the Stanford Victims, but due to various restraints that exist in current law, SEC was able to reject this settlement offer on behalf of all the victims. This legislation creates an avenue by which, under the extraordinary circumstance of the SEC filing suit against SIPC to force a liquidation and payout, both SIPC and the individual victims would have the option to request, evaluate, and decide on their own whether they wish to take a one-time payment and exclude themselves from any further claims against the SIPC fund.

The Improving Security for Investors and Providing Closure Act, or Improving SIPC Act of 2012 does not force SIPC or the Stanford Victims to do anything. Instead, this legislation allows both parties to settle on these claims for a negotiated amount, as SIPC and countless victims hoped to do last year.

"R. Allen Stanford defrauded thousands of hard working men and women of their entire life savings. The Improving SIPC Act of 2012 offers victims a choice to recoup some of their money," said Congressman Bill Cassidy. "Those who lost smaller amounts will be eligible for reimbursement from SIPC while those who decide to continue their court battle will be able to do so. Many victims of the Stanford Ponzi Scheme were working men and women, this legislation will enable them to put this tragedy behind them."

"The United States shut down the Stanford Financial Group in 2009, yet the thousands of Americans defrauded in this despicable Ponzi scheme have yet to be made whole," said Congressman Ted Deutch. "This legislation will provide some of the Stanford victims the opportunity to be reimbursed by SIPC without impeding the efforts of other victims to seek justice through the courts. This is a commonsense bill and I look forward to working with Congressman Cassidy and other bipartisan leaders to provide the victims of R. Allen Stanford with a choice they deserve to make."

Read more: http://sivg.org/article/2012_Cassidy_Deutch_Improving_SIPC_Act.html


Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/

Mittwoch, 1. Februar 2012

Accountant details Stanford investment spending

February 1, 2012
By Associated Press
An accountant who worked for Texas tycoon R. Allen Stanford testified Wednesday that he grew increasingly concerned that the financier wouldn't be able to return the $2 billion he secretly borrowed from investors to pay for business and personal expenses, including millions to maintain his yachts and private jets.

Henry Amadio told jurors at Stanford's federal fraud trial in Houston that various businesses into which Stanford sunk funds were basically a money pit that ate up investor dollars and didn't turn a profit. The money Stanford borrowed included $330 million for two airlines and a $20 million prize for a cricket tournament, Amadio said.

"As it continued to grow ... the concern was: Was it (investors' money) ever going to be paid back?" he said.

Amadio told jurors he faults himself for not leaving Stanford's company after realizing what the financier was doing. "I'm not proud. I regret looking the other way," said Amadio, whose voice choked with emotion.

Prosecutors allege Stanford masterminded a fraud in which he bilked investors out of more than $7 billion in a massive Ponzi scheme centered on the sales of certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua. Authorities allege he used depositors' money to fund his businesses as well as his lavish billionaire lifestyle and that he lied to depositors by telling them their funds were being safely invested.

Stanford's attorneys contend the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They have suggested James Davis, the ex-chief financial officer for the financier's company, is behind the fraud. Davis has pleaded guilty in the case and is expected to be called by prosecutors this week.

Stanford is on trial for 14 counts, including mail and wire fraud, and faces up to 20 years in prison if convicted.

Amadio said Davis also expressed concern about the growing amount of CD funds that kept Stanford's businesses afloat, even making the comment on two occasions that "the emperor has no more clothes."

"I interpreted that (comment to mean) that Mr. Stanford didn't have any money to cover these debts," Amadio said.

The accountant told jurors the profits the bank purported it was making were not enough to cover the $2 billion Stanford had borrowed by 2009.

"Was it even close?" prosecutor Gregg Costa asked.

"No," replied Amadio, who worked six years for the Stanford Financial Group Co. in Houston.

Amadio detailed for jurors the investor funds the financier allegedly poured into his many companies. They included $30 million for expenses related to Stanford's six private jets; more than $346 million for construction projects on Antigua; $11 million for a newspaper on the island; nearly $19 million to maintain Stanford's yachts.

Amadio also testified that in 2006, he was ordered to remove various documents he prepared, including a monthly report that tracked the amount of CD deposits going to Stanford's businesses, from the company's network drive and place them on an external drive and that this information would be held at the bank in Antigua.

Amadio said he was not aware that around the time this request had been made, the U.S. Securities and Exchange Commission had begun investigating.

The accountant described a working environment full of secrecy where "everything was on a need to know basis" and where he could be fired if the monthly reports he prepared tracking investor funds were made public.

Amadio said one of the secrets he stumbled onto was a Swiss bank account with Societe Generale belonging to Stanford that detailed payments made to the outside auditor for Stanford's bank. Bank statements shown to jurors indicated payments of $100,000 and $125,000 made to the auditor in 2005 and 2006. Prosecutors allege Stanford used the account to bribe the auditor with millions of dollars to hide the bank's fraud.

While questioning Amadio, Robert Scardino, one of Stanford's attorneys, told jurors Stanford was a "risk taker" and that some of his businesses made money and some didn't. Scardino said despite the economic crash of 2008, Stanford continued paying depositors who withdrew their CDs until his businesses were put in receivership.

Amadio, who acknowledged he fainted after first speaking with FBI agents when authorities shut down his office in 2009, said an agreement he has with prosecutors doesn't prevent him from being charged.

"If you testified to something that is different than what the prosecutors think is the truth, you are in trouble aren't you?" Scardino asked.

"I'm here to tell the truth," Amadio said.

Stanford was once considered one of the United States' wealthiest people, with an estimated net worth of more than $2 billion. He's been jailed without bond since being indicted in 2009.

Read more: http://sivg.org/article/2012_Accountant_details_Stanford_investment_spending.html


Visit the Stanford International Victims Group - SIVG official forum http://sivg.org/forum/