Stanford investors file suit in district court

A lawsuit has been filed in district court in Baton Rouge, charging select high-level employees and investment advisors with the Stanford Group with failing to tell clients about the risks associated with their investments and not doing the proper due diligence before recommending investments. The lawsuit, filed by 10 local investors, accuses Stanford officials of negligence, breach of contract, negligent representation, breach of fiduciary duty, unfair trade practices and violation of the state securities act. The suit seeks to prohibit the defendants from transferring or encumbering their assets and seeks unspecified damages. Attorney Phil Preis filed the suit. He charges Stanford officials with selling “ultra-high risk speculative mezzanine type debt junk bonds” instead of the certificates of deposits the clients thought they were buying, and refers to Stanford as a “speculative highly leveraged hedge fund” instead of the bank with which investors thought they were trusting their money. This is the first suit investors have filed against Stanford in a Louisiana district court since details of the financial scandal were released by the SEC. To view the suit, click here.