Ponzi scheme involving approximately $18.7 million of investor's money has led
to a lawsuit filed against the U.S. Securities and Exchange Commission
(SEC). The suit was filed with the United States District Court, Northern
District of Texas, Dallas Division, on Thursday, March 24, 2011.
The suit was filed by eight individuals who claim the SEC's negligence
and misconduct over its investigation into the alleged Stanford International
Bank, Ltd Ponzi scheme led to $18.7 million in investment losses. Houston
and Louisiana resident, Cynthia R. Dore, claims that she lost nearly $3.1
million in the scam. The remaining investors are Louisiana residents.
The founder of Stanford Financial Group, R. Allen Stanford, is currently
awaiting trial on fraud charges associated with the $8 billion investment scheme.
The investors said that the SEC should have investigated and detected Stanford
Financial Group's activities earlier.
"But for the negligent acts and
omissions, misconduct and breaches of duty by Spencer Barasch, a former SEC regional
enforcement director, the negligent supervision of Barasch by his SEC
supervisors, and other inexcusable acts of negligence by SEC employees,
the plaintiffs would not have made, and lost, their investments,"
the lawsuit states.
Mr. Stanford's operations were seized by the SEC in February 2009.