- Thousands Who Lost Money on CDs from Stanford’s Offshore Bank Are Likely to Be Repaid by SIPC
Thousands Who Lost Money on CDs from Stanford’s Offshore Bank Are Likely to Be Repaid by SIPC
Posted Jun 15, 2011 3:58 PM CST
By Martha Neil
Investors who purchased worthless certificates of deposit from a brokerage unit of alleged Ponzi schemer R. Allen Stanford's offshore bank are likely to have at least some of their losses covered by the Securities Investor Protection Corp.
Although the SIPC earlier denied such claims, contending that the CDs are still in investors' possession, albeit valueless, it is likely to reverse course after a ruling today from the U.S. Securities and Exchange Commission that the industry group should have covered the claims, Dow Jones Newswires explains.
Onetime billionaire Stanford, who has had a convoluted history of legal representation and at last report was unable to assist in his own defense because of medication and injuries, is jailed in Texas awaiting trial in a related criminal case. He is accused of orchestrating a $7 billion scheme that allegedly defrauded thousands who thought they were buying a safe investment.