U.S. justices say Allen Stanford victims can sue lawyers, brokers

[Eugene]

Source: Reuters

BY LAWRENCE HURLEY
WASHINGTON Wed Feb 26, 2014 12:27pm EST

(Reuters) - Investors in Allen Stanford's $7 billion Ponzi scheme can sue to recoup losses from lawyers, insurance brokers and others who worked with the convicted swindler, the U.S. Supreme Court ruled on Wednesday.

On a 7-2 vote, the court held that lawsuits filed in state courts can go forward.

Stanford's fraud involved the sale of bogus certificates of deposit by his Antigua-based Stanford International Bank. He is serving a 110-year prison sentence.

New York-based law firms Chadbourne & Parke and Proskauer Rose and insurance brokerage Willis Group Holdings Plc were all sued by former Stanford investors. The investors also sued financial services firm SEI Investments and insurance company Bowen, Miclette & Britt.

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Read more: http://www.reuters.com/article/2014/02/26/us-usa-court-stanford-idUSBREA1P17220140226

[Gothmog]

1. This case was discussed at CLE seminar that I attended

One of the attorneys representing the plaintiffs in this case was a speaker at a CLE event on secondary liability under the securities laws. The statute in question is SLUSA which goes back to Newt Gingrich and the Contract against America adopted in the 1990s. One of the laws passed as part of Newt's contract on America (the PLSRA) limited the ability of plaintiffs to bring class actions under the Federal securities laws and another law, SLUSA, limits the ability to bring these class actions in state court with respect to transactions "in connection with" a covered security. The law firm in question was taking the position that the "in connection with" language in SLUSA had to be read so broadly that no class actions could ever be brought in state court.

From what I have read, I agree with the SCOTUS opinion in this case.

[Sunlei]

2. very interesting, good news! Sure am happy 'Professor' Obama uses his experience for good!

Now hopefully the dark side won't drag this out in the courts for 100 years

[maindawg]

4. SCOTUS is the last word

wonder if any of these creeps will go to jail?

[happyslug]

3. here is the Actual Opinion

http://www.supremecourt.gov/opinions/13pdf/12-79_h3ci.pdf