The Louisiana Office of Financial Institutions says it is not obligated to take “any specific action in regulating a financial institution.” According to a petition filed by the office in response to the lawsuit filed by a group of Stanford Financial Group victims, any claims made against OFI are irrelevant because state law does not require the agency to protect investors. “The statues are worded in very broad, discretionary terms that require the Commissioner [of OFI] and his employees to use their judgment in pursuing or not pursuing a specific course of action,” says the petition.
The petition, which is a response to the class-action lawsuit filed by Phil Preis, a Baton Rouge-based attorney, on behalf of a large group of Louisiana-based investors who purchased Stanford International Bank certificates of deposit at the center of an alleged $7 billion Ponzi scheme, was filed late Friday. It also claims that the state cannot be held responsible for the criminal acts of those it may regulate and that, even if the 19th Judicial District Court deems they are responsible, that the suit against them was filed too early. The plaintiffs, the lawsuit says, should have to wait until after it is determined if the wronged investors will receive any of their money back from the Stanford receiver before filing against the state.—Olivia Watkins
