Ponzi Victims Can't Seek Compensation from SIPC

Victims of Allen Stanford’s $7 billion Ponzi scheme cannot seek compensation from the federally-mandated Securities Investor Protection Corporation, the D.C. Circuit ruled. In an unprecedented move, the Securities & Exchange Commission sued the SIPC in December 2011 in D.C. federal court after it refused to force liquidation proceedings in Dallas federal court that would result in victims being compensated. The SIPC is a self-regulating organization comprised of US-registered broker dealers that was mandated by Congress. It administers a fund that compensates investors in case a member fails. More on Courthouse News Service here.