Supreme Court Green Lights Class-Action Suits By Stanford’s Victims

The Supreme Court has ruled 7-2 to allow victims of the Stanford Ponzi scheme to pursue class-action lawsuits. The scheme, perpetrated by former Houston financier R. Allen Stanford, cost investors more than $7 billion.  

Stanford’s victims have long argued that R. Allen Stanford could not have carried out his fraud without the help of a network of outside companies. But they ran up against a wall when trying to obtain relief in federal court. Josh Blackman teaches constitutional law at South Texas College of Law.

“The main problem was the securities which Stanford was selling them were not actually real securities. They were fake. They were fictional. The federal law would not permit the recovery for these fictional securities. They only permit recovery for actual covered securities.”

The victims filed suits at the state level, in Texas and Louisiana, against a number of firms they allege aided Stanford. The companies — which include Houston insurance broker Bowen, Miclette & Britt — sought to have the cases thrown out. The High Court ruling means those suits can now go forward.

Stanford was tried and convicted in 2012 for orchestrating the Ponzi scheme. He is serving a term of 110 years in federal prison, with no chance of parole.


Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined News 88.7 in January 2011. Since arriving in Houston, he has reported on the many changes wrought on the region’s economy by the revolution in domestic oil and gas production. His non-energy reporting runs the gamut from white-collar crime to cattle ranching. His work has aired on...

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