Securities Law Prof Blog

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

Monday, April 5, 2010

Sale of Stanford Assets Nets Fraud Victims $14 Million

The SEC announced today that approximately $14.2 million has been secured for the benefit of the worldwide victims of R. Allen Stanford's alleged multi-billion dollar fraud scheme. The Receiver expects these funds to be returned to the receivership estate by June 2010.

R. Allen Stanford is the sole stockholder of an entity that wholly owned a bank and brokerage business in Panama City, Republic of Panama, known as Stanford Bank (Panama) S.A. (SPB) and Stanford Casa de Valores, S.A. (SCV). On February 17, 2009, after the Commission filed its enforcement action against R. Allan Stanford and others, the Superintendencia de Bancos de Panamá, the Panamanian banking regulator, and the Comisión Nacional de Valores, the Panamanian securities regulator, assumed control, operation and subsequent reorganization of SBP and SCV, with a perspective of bringing those entities under new ownership and reopening them

Ultimately, with the approval of the Superintendencia de Bancos de Panamá, the Receiver negotiated and concluded a contract to sell SBP, SCV and certain other assets in Panama to the third party purchasers. This contract specifically conditioned the sale on the approval of the U.S. Court, and the unfreezing of SBP accounts in foreign jurisdictions in which SBP depositor accounts were located. The sale of SBP and SCV was approved by United States District Judge David C. Godbey, Northern District of Texas, on February 10, 2010 and the sales contract was closed on March 31, 2010.

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