SEC Drops Stanford Suit Against Brokerage Insurance Fund

WASHINGTON—The Securities and Exchange Commission plans to abandon its legal battle to require a brokerage industry insurance fund to pay investors in R. Allen Stanford’s $7 billion Ponzi scheme, two months after an appellate court rejected the SEC’s arguments in the case. The U.S. Court of Appeals for the District of Columbia Circuit in July ruled the SEC failed to prove victims of the Ponzi scheme were “customers” eligible for compensation by the Securities Investor Protection Corp. under the narrow definition of the law. The ruling upheld a district-court decision from 2012. “After very careful deliberation, the commission determined not to seek further review” of the decision, said SEC spokesman John Nester, in a brief statement Friday. “We remain committed to the victims of the Stanford fraud and will continue to work with the Stanford Receiver, Justice Department, and other interested parties to maximize recovery to harmed investors.” More in the Wall Street Journal here.