KLS complaint against the U.S. Government/SEC
December 21, 2011
By Dr. Gaytri D. Kachroo
Ft. Lauderdale, FLA - A class action lawsuit was filed against the United States on December 13, 2011, for the billions
in losses suffered by investors in the Allen Stanford international Ponzi scheme.
The case, filed in the United States District Court for the Southern District of Florida seeks to hold the SEC responsible for its failure to stop Stanford and his registered investment advisor and broker/dealer company Stanford Group Company ("SGC"), who the SEC investigated several times between 1997 and 2004. The suit claims that the SEC was grossly negligent in its actions following each investigation in failing to take any action to stop Stanford, whom SEC official had determined was operating a Ponzi scheme. The class action against the SEC was filed the day after the SEC filed suit against the Securities Investor Protection Corporation ("SIPC") for its refusal to reimburse investors for their losses.
"This case is unique because the SEC knew all along that this was a fraud and did nothing," said lead attorney Dr. Gaytri Kachroo of Kachroo Legal Services, P.C. (KLS), who is representing investors in the class action. "If the SEC had simply refused to register SGC for any of its various securities laws violations or reported to SIPC that SBC was a Ponzi scheme and insolvent, the SEC could have stopped this scheme over a decade ago."
In government investigations in 1997, 1998, 2002, and 2004, the SEC determined that Stanford was operating a Ponzi Scheme, but failed to take action to prevent his fraud. After increasing pressure from the Madoff collapse, the SEC finally acted in 2009, filing a case in federal court against Stanford and his companies, but only after investors had been defrauded of over $7 billion. The suit also alleges that the court-appointed SEC receiver has only been able to recover $100 million, net of expenses, out of the $7 billion investors lost because of the SEC's negligence.
The case is Zelaya et al. v. United States of America, Case No. 11-CV-62644-RNS (S. D. Fla. 2011).
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|MEXICAN-VICTIM wrote on December 22, 2011 at 17:01|
Stanford ran the conglomerate of Stanford entities through four main operating companies:
b. SGC, an SEC registered broker/dealer and investment adviser company;
c. the Stanford Trust Company (Louisiana) ("STC"); and
d. the representative offices of Stanford Trust Company (Antigua) that operated in Miami, Houston and San Antonio under the d/b/a "Stanford Fiduciary Investor Services" ("SFIS").
The primary function of the Stanford financial network was to funnel investments into the CDs issued by SIBL. The SIBL CDs were sold worldwide by a web of different Stanford promoter companies, including SGC, SFIS and STC.
The SEC Failed to Notify SIPC After Concluding That SGC Is Likely Insolvent Because It Was Part Of A Ponzi Scheme And Funded By Misappropriated Monies.
|VICTIM wrote on December 22, 2011 at 17:22|
Well done Gaytri!
My best wishes and big thank you for your dedication to bring justice in all this mess & fraud.