SEC says Stanford victims deserve protection

The Securities and Exchange Commission has decided to extend Securities Investor Protection Corporation coverage to investors who were defrauded by the Stanford Financial Group. The SEC has asked SIPC to initiate a liquidation proceeding that would allow Stanford investors to file claims against it. Stanford victims groups long pleaded with SIPC for coverage of their lost assets—pointing to the fact that many victims of the Bernie Madoff scandal were compensated by the organization that is supposed to protect investors in the event of a brokerage firm’s failure. They were backed up by members of the local congressional delegation. U.S. Sen. David Vitter announced Tuesday he was placing a hold on President Barack Obama’s nomination of two new members to the SEC until the agency made a decision on the SIPC extension. Vitter announced today he was dropping that hold. U.S. Rep. Bill Cassidy, R-Baton Rouge, applauded the SEC decision. “These victims worked hard, saved and lived within their means; and today the financial security that was stolen from so many has been returned,” Cassidy says. Allen Stanford is awaiting trial for allegedly defrauding $7 billion from investors, many of whom live in south Louisiana. For more information on the Stanford case, click here for a recent Business Report story.