Justice Department opens investigation on Stanford, who now claims memory loss

The saga that is the $7 billion ponzi scheme allegedly perpetrated by Texas financier Robert Allen Stanford just gets more and more twisted. Today The Wall Street Journal reports the Justice Department is investigating whether French bank Société Générale SA helped facilitate the ponzi scheme by ignoring suspicious transactions. You can read the article here. Also today, the Securities Investor Protection Corporation says it has not yet reached a decision on whether or not it will reimburse, up to $500,000 per claim, those who lost money in the scheme. “The board of the SIPC is continuing its careful review of the many and complex issues in the Stanford case. We fully appreciate the gravity of this matter and remain committed to reviewing it thoroughly and with all deliberate speed. With this issue still under advisement, the SIPC Board will make an announcement when its consideration of the matter is concluded,” reads the entire statement. In June, the Securities and Exchange Commission officially referred the matter to the SIPC, a congressionally created insurer against insolvent brokerage firms. SIPC covers customers when a broker becomes insolvent, but normally doesn’t cover fraud. Since 2009, the SIPC has informally advised that its protections weren’t available for Stanford investors. SIPC had said in July it would have a decision made around Sept. 15. Stanford was sued by the SEC and indicted on federal criminal charges in 2009. He has denied any wrongdoing while awaiting a trial, scheduled for next year, in federal custody. In another Wall Street Journal article, published Thursday, a “person familiar with the matter,” says Stanford—”who has gone through a carousel of defense lawyers, an addiction to medication and a jailhouse beating”—is now complaining of amnesia. You can read that article here. Access to both articles requires a subscription.