A federal judge ruled Friday evening that a court-appointed receiver who took over companies run by Texas billionaire Robert Allen Stanford can recover only the interest—not the principal—on investments that prosecutors say fed a multibillion-dollar Ponzi scheme.
Judge David C. Godbey sided with the Securities and Exchange Commission. In an emergency motion, the SEC said lawyer Ralph Janvey was targeting innocent investors who should not have to turn over their original investments in certificates of deposit at Stanford’s bank in Antigua.
Stanford and four executives are accused of advising clients to invest more than $7 billion in CDs from the Stanford International Bank and then misusing the money, in part to pay for Stanford’s lavish lifestyle.
In a concession to Janvey, the judge agreed to extend by 10 days a freeze on accounts containing principal invested in CDs. The freeze was set to expire today, which would have allowed investors to get their money back.
The move gives Janvey time to appeal the ruling, which Janvey said he plans to do.
