After waiting three years to see the Texas financier R. Allen Stanford go to trial on charges of leading a $7 billion Ponzi scheme, investors who lost fortunes in the alleged scam must hold on even longer before learning when they will get some of their money back, as Bloomberg reports in a lengthy article featuring victims from Baton Rouge. Stanford’s customers have received nothing since the U.S. Securities and Exchange Commission closed his businesses in February 2009. “It’s not fair that we have to be put through this living hell,” says Blaine Smith of Baton Rouge, who claims to have lost $1 million in life savings invested with Stanford. Accused of misleading people who bought certificates of deposit from his Antigua-based bank, Stanford spent their money on bad investments, sports sponsorships and a lavish lifestyle that included yachts, a fleet of jets, mansions and a private Caribbean island, U.S. prosecutors say. Jury selection in his criminal trial is scheduled to start Monday in federal court in Houston. Stanford, who denies any wrongdoing, faces a sentence as long as 20 years in prison if convicted. The U.S. Securities Investor Protection Corp. has previously taken the position that the Stanford investors weren’t covered by its enabling Securities Investor Protection Act—though it committed to pay victims of Ponzi schemer Bernie Madoff almost $800 million. On Dec. 13, the SEC sued SIPC, seeking another path to aid the victims’ recovery. A hearing is scheduled for Jan. 24. Meanwhile, Smith and many victims like him, remain in limbo awaiting a decision. “We can’t take any more abuse” he says. Read the full story here.
Today’s poll question: Do you think victims of R. Allen Stanford’s alleged $7 billion Ponzi scheme should be reimbursed by the SIPC for their losses?
