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 here.

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