Stanford investors not getting help like Madoff victims

Investors who lost billions from the alleged Stanford International Bank Ponzi scheme are upset they’re not getting help from the Securities Investor Protection Corp., like the people who were defrauded by Bernie Madoff. SIPC repays up to $500,000 in custodial losses to investors whose securities are missing from accounts at member firms, reports Bloomberg News. The problem is that Stanford investors purchased certificates of deposit. “With Madoff, the money was entrusted to him, and he just spent it,” says Stephen Malouf, a Dallas lawyer. “There was an extra step at Stanford, the purchase of the CDs, which are still there. SIPC doesn’t cover securities that are purchased but then decline in value.” That’s of no consolation to people like Blaine Smith of Baton Rouge, a retired refinery worker who says his $1.5 million investment with Stanford dwindled down to $206. “Our money was just cash that passed through the brokerage and the bank, and then Stanford spent it, just like Madoff did,” Smith told Reuters. Read the story here.