Block SEC Nominees Until Stanford Victims Get Answers
June 14, 2011
(Washington, D.C.) – U.S. Sen. David Vitter today announced that he will block the nominations of two Securities and
Exchange Commission members until the SEC responds to a request by victims of the alleged Stanford Group Co. Ponzi
scheme who are seeking to receive Securities Investor Protection Corporation coverage for their losses.
"Unfortunately, the SEC has not yet given the Stanford victims an answer despite my repeated conversations with
Chairwoman Mary Schapiro," said Vitter. "Many of these folks in Louisiana and along the Gulf region lost their life
savings, and they at least deserve a direct answer on their request for coverage. After months of delay the commission
has now met a number of times to consider SIPC coverage for Stanford's victims. It would be salt in the wound of these
victims for Congress to force those discussions to start over by approving new commissioners.
"We've known for some time that the SEC waited far too long to take action against Allen Stanford, and now they're
dragging their feet in responding to the victims. I will continue to hold them accountable – including holding these
nominations – until these fraud victims get an up-or-down answer from the SEC on SIPC so they can move forward in the
process, and if necessary, file a judicial appeal."
At a U.S. Senate Banking Committee hearing last year, Vitter raised concerns about the SEC's misleading statements
about its handling of the Stanford case. An Inspector General's report showed the SEC's examination office had been
looking into the Stanford Group since 1997 and were concerned it was a "possible Ponzi scheme," but at a previous
banking committee hearing, SEC officials claimed the investigations only began in 2004.
The SEC has five commissioners who are appointed by the President with the advice and consent of the Senate. Mr.
Daniel M. Gallagher (a partner at the law firm Wilmer Cutler Pickering Hale & Dorr LLP) has been nominated to fill
the seat being vacated by Commissioner Kathleen Casey and the Honorable Luis Aguilar is being re-nominated because
the term for which he is now serving expires June 5, 2010. Vitter is concerned that because the Commission has claimed
to be close to a ruling, bringing a new commissioner into the mix would unnecessarily slow down the pace.
Once the SEC issues a recommendation on the coverage of claims of Stanford's alleged victims, Vitter would release
his hold on SEC nominees Luis Aguilar and Daniel Gallagher, his office said.
Some of Vitter's comments at the hearing:
"I unfortunately came away from today's hearing even more convinced that the SEC has been purposely misleading this
committee about the agency's mishandling of the Stanford case," said Vitter. "The Inspector General's latest report
clearly showed that the SEC's examination office had been looking into the Stanford Group since 1997 and were concerned
it was a ''possible Ponzi scheme.'' Yet, at a Senate Banking Committee hearing last August, SEC officials claimed the
investigations only began in 2004.
"As if the fraud Stanford committed wasn't bad enough, the agency's attempts to cover up its negligence pour salt on
the wound of Stanford's victims, who have already lost much of their life savings.
"There are critical discrepancies between the IG report and the testimony we've heard from SEC officials, and Ms.
Romero's answers to the Senate Banking Committee raise more questions about her credibility and those who helped her
prepare her testimony. I'm going to continue demanding answers and working with the Senate Banking Committee to get
the answers Stanford's victims deserve because it's not yet clear how high up the chain the deception goes at the SEC."
Boustany Seeks Justice for Stanford Victims
Washington, DC – U.S. Congressman Charles W. Boustany, Jr., MD (R-Southwest Louisiana), a leading voice in Congress
for the victims of the Stanford Ponzi schemes, today praised his Senate colleague for pledging to stop the nominations
to the Securities and Exchange Commission (SEC). U.S. Senator David Vitter announced he will block the nominations of
Daniel M. Gallagher and Luis Aguilar to the SEC until the commission assists victims of the Stanford schemes with
Securities Investor Protection Corporation coverage.
"We must continue to fight the Administration for the answers they are unwilling to provide," Boustany said.
"These nominees should be withheld until the SEC answers the questions I've asked on behalf of the victims of this
scheme. I am determined, along with Senator Vitter, to help Stanford victims gain financial relief and will continue
to push for remedies through the SEC and in Congress."
In April, Congressman Boustany demanded answers from the SEC on their efforts to assist Stanford victims. The SEC
response defended their two-year investigation but provided no further details.
Congressman Boustany also joined Representative Bill Pascrell, Jr. (D-NJ) to introduce the Ponzi Scheme Victim's Tax
Relief Act of 2011. The bill expands the net operating loss carryback period for investors in a Ponzi-type scheme
from five to 10 years. Victims who lost money in a Ponzi scheme can recoup the losses by declaring them as net
operating losses during previous tax years and collecting refunds from those tax years.
Paul Coussan
Press Secretary
Rep. Charles Boustany, Jr. MD (LA-07)
1431 Longworth House Office Building
Washington, DC 20515
(337) 288-1665
Paul.Coussan@mail.house.gov
www.boustany.house.gov
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