The class action lawsuit was filed by four Stanford investors, but they represent a group of about 30-thousand people who may have lost as much as 8-billion dollars in investments that were misrepresented to them by Stanford.
George Fleming: "This is the financial equivalent of a drive-by shooting."
Attorney George Fleming represents the four investors. He says the suit claims Houston-based Stanford Group Company and Stanford Capital Management promised double-digit returns on certificates of deposit that exceeded those available through CDs offered by traditional banks.
"That the funds that Stanford did primarily were in liquid financial instruments. Stanford also told the investors that they had a team of 20-plus analysts that were monitoring the portfolio, that the portfolios were subject to yearly audits by Antigua regulators. They also said that they had no direct or indirect exposure to the Madoff Scheme. We believe that all of those representations were false."
Fleming says his clients are people who worked hard for their investment.
"There's people that have invested for their children. There's people that invested to send their kids to college. There's people that have invested as a result of a parent dying and inheritance of an estate. There is all kinds of different situations all in jeopardy right now."
Jeanie Wyatt owns an investment company and writes a newspaper column geared toward business people, particularly women. She says people who decide to invest should do so with an important rule.
"Put your assets at a custodian that is independent from your adviser."
She says investment managers are required to fill out a regulatory form that discloses everything.
"Because in a firm where there is a conflict with clients, it becomes in my opinion, it becomes very important that that adviser is not putting their client's interest first. So I would say reading the fine print is important."
Attorney George Fleming calls it a painful lesson for investors.
"The issue really now, is public trust, in terms of where do investors put their money where they can feel like they have it in safe hands."
Pat Hernandez, KUHF...Houston Public Radio News.