Stanford Ponzi case pits SEC against court-appointed receiver

Fairness of forcing ‘innocent investors’ to return CD principal payments is questioned

Aug 11, 2009 @ 1:05 pm

By Sara Hansard

The Securities and Exchange Commission has taken the unusual step of opposing what a court-appointed receiver is doing in the massive Ponzi case that involves companies owned by Robert Allen Stanford.

According to briefs and motions filed yesterday evening and released today, the SEC opposed actions taken by Stanford receiver Ralph Janvey to attempt to recover principal and interest from hundreds of Stanford victims who received payments of certificate of deposit principal from Stanford International Bank Ltd., a company in Antigua, West Indies, that was controlled by Mr. Stanford.

“The receiver’s claim to recover principal lack statutory and case law support, and it would be inequitable to require the innocent investors to repay these amounts,” the SEC said in briefs filed with the 5th U.S. Circuit Court of Appeals in New Orleans.

Thousands of other investors, including those outside the court’s jurisdiction, have received principal payments from Stanford International Bank, the SEC said in a release.

“It would be unfair to make this small subset of admittedly innocent investors return the funds they invested, or even litigate, while thousands of similarly situated investors are not pursued,” the SEC said.

Calls to Mr. Janvey, who is also a partner in Krage & Janvey LLP, a law firm based in Dallas, were not returned.

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