It’s been more than six years since federal agents stormed the offices of the Stanford Financial Group, and more than three years since Allen Stanford was convicted of running a multibillion-dollar Ponzi scheme. Back in 2009, Stanford’s victims—many of whom had lost their entire retirement savings—held public forums with their elected leaders and pleaded for someone, anyone, to make them whole again.
The victims have been much quieter lately. A website belonging to the Stanford Victims Coalition seems not to have been updated in years, and it hosts a purported link to a Louisiana victims group that leads nowhere. Business Report tried to contact local victims who have spoken out in the past for a feature in the current issue. They either did not return the call or declined to be interviewed, explaining that they’re burned out on talking about their plight.
But the fight to obtain some sort of compensation for Stanford’s victims continues.
“There’s a lot going on,” says Baton Rouge attorney Phil Preis, who is pursuing a class action on behalf of the victims. “I remain optimistic that, within the next six months to a year, there are going to be some major recoveries. I know a lot of people are spending a lot of time trying to make it happen.”
There have been setbacks. Last year, a District of Columbia appellate court ruled that, unlike Bernie Madoff’s victims, people swindled by Stanford were not entitled to money from the industry-funded Securities Investor Protection Corp. because Stanford’s Antigua-based bank was not an SIPC member.
But the Stanford Financial Receivership, headed by Dallas attorney Ralph Janvey, is fighting on many fronts. A number of those claims have been successful, although so far investors have received only a penny or two on the dollar, Preis says.
The receiver is going after interest payments to “net winner” investors who profited from their Stanford deposits before the Ponzi scheme collapsed, as well as commissions paid to 66 Stanford financial advisers in connection to the scheme. It is so far unclear whether claims against the advisers will be settled in arbitration or in court.
“I suspect that over the last seven years a lot of those assets have been transferred or spent, so there’s not going to be a lot of recovery,” Preis says of claims against the advisers.
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