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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.

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas delegations in the U.S. House and Senate, as well as the Texas governorship, the state legislature, and county and city governments. Before taking up his current post, Andrew...

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