Thousands of anxious clients with accounts in companies controlled by Texas financier R. Allen Stanford, who is accused by the Securities and Exchange Commission of running an $8 billion fraud scheme, received long-awaited good news from a federal judge in Dallas yesterday.
Thousands of anxious clients with accounts in companies controlled by Texas financier R. Allen Stanford, who is accused by the Securities and Exchange Commission of running an $8 billion fraud scheme, received long-awaited good news from a federal judge in Dallas yesterday.
Approving a plan submitted by Dallas attorney Ralph Janvey, the court appointed receiver in the Stanford case, U.S. District Judge David Godbey agreed to release most brokerage accounts of more than $250,000 that have been frozen since mid-February,.
The order affects about 16,000 Stanford customer brokerage accounts held in custody at JPMorgan Clearing Corp. of New York, according to court documents filed by Mr. Janvey.
On Monday, Judge Godbey released 12,600 accounts with net assets of less than $250,000 in Stanford companies that were held in custody at Pershing LLC of Jersey City, N.J.
Mr. Janvey has estimated that approximately $6 billion in assets are being held in 32,000 Stanford accounts at Morgan and Pershing.
Judge Godbey yesterday also granted the U.S. government's request to indefinitely freeze the assets of Mr. Stanford and three of his companies, Stanford Group Co. and Stanford Capital Management, both of Houston, and Stanford International Bank Ltd. of St. John’s, Antigua.
On Wednesday, Mr. Stanford said he would not testify in the case, citing his Fifth Amendment right not to incriminate himself.
About 4,000 accounts will remain frozen. Those will include accounts belonging to registered representatives or financial advisers “who earned commissions or fees based on certificates of deposit or owed loans to Stanford Group Co.”
Last week, Mr. Janvey notified 1,000 employees of Stanford Financial Group of Houston, who accounted for approximately 85% of Stanford’s U.S. employees, that they were being terminated, and would receive no severance compensation or bonus.
“Continuing employment for these employees is not in the interest of conserving and preserving the value of the estate because there are insufficient resources to continue to compensate all present employees,” Mr. Janvey said in a statement.
Mr. Janvey is a partner in the Dallas law firm Krage & Janvey LLP.
