LAST UPDATED ON February 24, 2010. With the arrival today of two more lawsuits against R. Allen Stanford and the Stanford Financial Group of companies, it may now be time to start keeping a table of the Stanford Group-related litigation. Given the magnitude of the losses and the publicity surrounding the Stanford scheme, there could well be a great deal more of litigation ahead.
My running tally of Stanford Group lawsuits can be found here. The document categorizes the suits into several tables, including a final table in which I have listed related proceedings. I will update the table as new cases arrive, and I will indicate the date of the most recent update at the top of this post.
The first of the two lawsuits to be added (that is, latest as of the time this post was originally created) today is the securities class action lawsuit filed on February 20, 2009 in the Middle District of Louisiana, in Baton Rouge. A copy of the complaint can be found here. This latest securities lawsuit joins two separate securities class action complaints previously filed in the Southern District of Texas, as well as the SEC enforcement proceeding filed in the Northern District of Texas. UPDATE: In addition to these cases, the plaintiffs in the first filed Southern District of Texas case have also filed a substantially identical complaint in the Nothern District of Texas as well, refer here.
The second of the two Stanford-related lawsuits to be added today is a lawsuit filed in Texas (Harris County) District Court by a trustee for the Rocky Mountain Trust. A copy of the trustee’s Original Petition can be found here. According to the Petition, the trust used its income to fund a foundation for "medical, dental and nutritional programs in Mexico and Central America." The Petition states that thousands of poor, including hundreds of Mexican orphans, have received assistance through the foundation. The defendants in the case include Stanford Group Company and related Stanford entities, as well as R. Allen Stanford and other individual Stanford directors and officers.
According to the Petition, the trustee was introduced to the Stanford group by acquaintances in Mexico. The trustee was persuaded to invest all of the trust’s assets in Stanford certificates of deposit. The trust is currently invested in three CDs, two of which total approximately $475,000 in face value and a third of which has a face value of about €202,000. Upon hearing of issues involving the Stanford CDs, the trustee unsuccessfully demanded return of the trust’s investment. The complaint asserts claims for common law fraud, violation of the Texas Securities Act, negligent misrepresentation, breach of fiduciary duty, aiding and abetting, conspiracy, and breach of contract. The complaint also seeks a temporary restraining order, and exemplary damages.
One common problem all of these cases will face is trying to get service of process on the elusive Mr. Stanford.
Hat tip to the Courthouse News Service (here) for the Louisiana and Texas state court complaints. Thanks to Adam Savett of the Securities Litigation Watch for the new Northern District of Texas complaint.
Other Stanford-Related Notes: The FCPA Blog has an interesting post today (here) questioning whether Stanford’s interactions with the Antiguan authorities could subject him to enforcement action under the Foreign Corrupt Practices Act.
Meanwhile, the February 24, 2009 Wall Street Journal is reporting (here) that a hedge fund run by Vice President Biden’s son and brother was exclusively marketed by companies controlled by R. Allen Stanford.
Finally, if you need a steady stream of news about the Stanford scandal, you will want to check out the Houston Chronicle’s Stanford Watch blog (here). Hat tip to the Daily Caveat for the link to the blog site.
For those readers who may not previously have seen it, I am also separately maintaining a list of litigation related to the Madoff scandal, which can be accessed here.