The Securities and Exchange Commission says that Stanford Financial Group investors cannot be subject to clawbacks on their original investments. In a friend of the court brief filed Thursday, the SEC says Stanford receiver Ralph Janvey is out of line in asking for the court to allow him to strip innocent investors of their original investments into the Stanford International Bank certificates of deposit, which have been at the center of an alleged $7 billion Ponzi scheme. According to the brief, “The receiver’s claims to recover principal lack statutory and case law support, and it would be inequitable to require the innocent investors in these cases to repay these amounts.” That means any investor should not have to give the receivership any money if they have only recovered the original funds they used to purchase the CDs.
However, the brief did say that any interest payments received in excess of their original investment would still be subject to clawbacks. Phil Preis, a Baton Rouge attorney who represents numerous Stanford victims in an appeal of the receiver’s clawbacks, said in an email response that, “the ruling could not be better.”—Olivia Watkins
