Stanford investors in Louisiana have appealed an attempt by Stanford Financial Group Receiver Ralph Janvey to claw back money he says is “ill-gotten gains” from the alleged Ponzi scheme. Since the Feb. 17 freeze on Stanford investor accounts and financial group operations by the Securities and Exchange Commission, Janvey has attempted to sue those who he acknowledges are innocent investors for both their initial investment in the fraudulent Certificates of Deposit, but also any interest they received.
Baton Rouge-based attorney Phil Preis, who represents the group which filed the cross appeal with the 5th Circuit Court of Appeals in New Orleans on Friday, says in the suit that clawing back any funds from investors is not supported by law because it is not being done to all investors, only to a select group. In the suit, Preis says that Janvey is only pursuing the “low-hanging fruit.”
Most of those investors facing clawbacks are based in the U.S., as Janvey does not have jurisdiction to sue investors in some foreign countries. The legal battle surrounding innocent investors has been ongoing since June. Janvey appealed an earlier decision by the courts, which stated that he could only claw back interest, not principal from innocent investors. The best possible outcome, Preis says, would be “no clawback of principal or interest of any innocent investors,” but that it would still be a victory for his clients if the court only allowed clawbacks any money in excess of his clients’ original investments.
Oral arguments in the cross appeal are scheduled to be heard Nov. 2. To view the lawsuit, click here.—Olivia Watkins
