Stanford bank official’s description of CDs undermines SIPC argument

Testimony in a legal dispute between the U.S. and Antiguan liquidators of the Stanford Financial empire seems to bolster investors’ arguments that Stanford’s certificates of deposit were more securities than traditional bank notes. Stanford’s U.S. investors have argued that because of the unusual nature of Stanford’s CDs, some of their losses from Stanford’s 2009 collapse should be covered by the Securities Investor Protection Corp. The Securities and Exchange Commission agrees and has ordered SIPC to pay, but SIPC has refused, arguing that Stanford’s CDs weren’t securities. The two sides are now headed to court, in yet another legal standoff involving Stanford’s alleged $7 billion Ponzi scheme. Read Houston Chronicle report here.

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