Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, February 19, 2009

The SEC and the Stanford Group Fraud

The fallout over the SEC's failure to uncover earlier the Stanford fraud begins.  The New York Times reports that both the SEC and FINRA previously found violations at the Stanford Group, but let it off the hook with small fines.  In 2007, for example, the SEC found that the firm did not meet the net capital requirements for broker-dealer firms and fined it $20,000.  Over the years FINRA imposed small fines against it for various violations.  SEC staff said it was looking into whether there were "red flags" that should have alerted the agency to more serious problems.  NYTimes, S.E.C. Fines Didn’t Avert Stanford Group Case.

The SEC has posted at its website information for investors about the court-appointed receiver.

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Our government should work to get information out as to the status or the non SIB accounts. There is virtually no information presently available as to what accounts are in jeopardy and when those that are not will be released.

As there was sufficient information available for the SEC to be allowed to take over the brokerage, there should be meaningful information for those of us who are affected. I think that the SEC should provide this information as to the status of the various investment accounts and when legitimate portfolio funds will again be available.

I hope that everyone reading this will likewise make this request by contacting our President ande and Congressmen. You may address our president at and your congressmen (See for contact information).

Posted by: JLM | Feb 19, 2009 8:27:42 PM

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