Supreme Court Rules Allen Stanford Ponzi Victims Can Sue Third Parties

Victims of R. Allen Stanford’s $7 billion Ponzi scheme can sue law firms and other third parties on allegations they aided the fraud, the U.S. Supreme Court ruled Wednesday. The court, in a 7-2 ruling written by Justice Stephen Breyer, said the victims’ class-action lawsuits were allowed even though a 1998 federal law largely prohibits state-law class-action claims for securities fraud. The ruling gives Stanford victims a chance to recover more of their losses. But it likely doesn’t open the floodgates for a wave of securities litigation since the holding is limited to products sometimes sold in Ponzi schemes that aren’t considered securities. More in the Wall Street Journal [...]

Supreme Court backs class-action lawyers in Stanford case

Link to OpinionThe Supreme Court today ruled 7-2 in favor of class-action lawyers pursuing securities cases under state law in a decision that involved the Allen Stanford Ponzi scheme.
The Supreme Court case, Chadbourne & Parke v. Troice, focused on the Securities Litigation Uniform Standards Act, which forbids bringing large securities class actions under state law. The question in the case was whether civil class action suits could proceed against defendants who allegedly helped Stanford’s Ponzi scheme by falsely representing that financial products that weren’t securities under the Securities Litigation law were covered securities. A District Court dismissed the lawsuits, then the Fifth Circuit reversed the lower court’s decision.The Supreme Court today upheld the Fifth Circuit decision, saying that the Litigation Act does not preclude the state-law class-action cases. Justices Anthony Kennedy and Samuel Alito [...]

“Big data” tools will improve regulatory oversight, FINRA’s di Florio says

The Financial Industry Regulatory Authority is developing a suite of “big data” information sources and analytics to improve regulatory oversight of securities firms, according to Carlo di Florio, FINRA’s chief risk officer and head of strategy. Leveraging technology and analytics can make for a “unique moment in regulation [that lets regulators] see things they couldn’t have seen or understood as well before,” di Florio said at an event this week hosted by the Securities Industry and Financial Markets Association compliance and legal society. More on Reuters [...]

Bernie Madoff’s Secretary Takes The Stand As Feds Try To Extend Prosecution

Madoff’s secretary Annette Bongiorno was a supervisor at Madoff securities. She and four others were charged in connection with the largest Ponzi scheme in history. Like the other defendants Bongiorno said that she had no knowledge that Madoff was involved in defrauding thousands of clients out of billions of dollars. More on CBS [...]

SEC Targets ‘Reverse Churning’ By Advisers

Assets in fee-based advisory accounts at U.S. brokerages are growing, drawing greater scrutiny from regulators concerned that some financial advisers could misuse the accounts. But there are steps brokers and advisory firms can take to ensure they don’t run afoul of regulators. More in the Wall Street Journal [...]

Annual Sutherland Analysis of FINRA Sanctions Shows 27% Decrease in Fines; Number of Cases Nearly Identical

Sutherland Asbill & Brennan LLP has completed its review of the disciplinary actions reported by the Financial Industry Regulatory Authority (FINRA) in 2013. By reviewing FINRA’s monthly disciplinary notices, Sutherland Partner Brian Rubin and Associate Andrew McCormick found that in 2013 FINRA’s fines dropped significantly but FINRA brought nearly the same number of disciplinary actions as it did in 2012. Sutherland also identified the top enforcement issues for FINRA in 2013, as well as emerging trends. More on MarketWatch [...]


Deadline for petitions to the Madoff Victim Fund has been extended to April 30th, 2014. More information can be found on the Department of Justice website at

Politicians yet to return big money from Stanford’s Ponzi scam

Five years after R. Allen Stanford’s investment companies collapsed in an infamous multibillion-dollar Ponzi scheme, records show that the receiver charged with recouping money for victims still is chasing a long list of politicians. Stanford was a generous and bipartisan donor to political campaigns. After his conviction, Ralph Janvey was appointed by the court as receiver and given the task of tracking down and recovering Stanford’s fraudulent expenditures so the money could be returned to the Ponzi scheme victims. More in the Washington Times [...]

In reversal, ex-Madoff aide takes stand in his own defense

In an unusual move, Bernard Madoff’s former back-office director took the witness stand in his own defense on Tuesday, telling a federal jury that he had no idea his boss was operating a Ponzi scheme until the day Madoff was arrested in December 2008. Daniel Bonventre, one of five former Madoff aides on trial in federal court in Manhattan who are accused of aiding in the fraud, said he remained in the dark throughout his 40 years at Madoff’s firm. More on Reuters [...]

ALERT: Now available to share with our membership

Congressman Garrett’s and Congresswoman Maloney’s letter to SIPC August 2013, and SIPC’s responses September 2013.
The link to our website page containing all the letters posted can be found by clicking [...]