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Senior Correspondent, CNBC
The court-appointed Receiver who is rounding up assets in the alleged Stanford Ponzi scheme says he will release hundreds of millions of dollars in hundreds of frozen customer accounts, following an appeals court ruling on Friday.
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AP Allen Stanford |
The accounts, totaling nearly $900 million, were among thousands frozen in February after the Securities and Exchange Commission sued the company and its founder, R. Allen Stanford, alleging they ran an $8 billion Ponzi scheme involving bogus certificates of deposit.
The accounts in question were owned by customers who managed to cash in their CDs before the company collapsed.
The Receiver, Dallas attorney Raph Janvey, had sought to seize the accounts and distribute the funds equally to all of Stanford's 28,000 alleged victims, arguing the proceeds amounted to "ill-gotten" gains paid by the thousands of customers who did not manage to cash in their CDs in time.
But as CNBC reported Friday night, a federal appeals panel ruled the funds had to be released to the customers. In a statement Monday, Janvey announced he will release the funds, but suggested he could go after them at a later time.
"The Receiver will continue to carry out his duty to recover assets traceable to the Stanford fraud for the benefit of all investors by pursuing recovery of, where cost justified, improper and/or preferential payments of Estate funds," the statement says.
In the meantime, Janvey has set out the procedures for customers to claim their funds. The information can be found at Janvey's web site.
The issue of so-called "clawbacks" has been very controversial, even among Stanford's alleged victims. Those who redeemed their CDs before the alleged scheme collapsed argued they were being unfairly targeted, while those who were unable to cash in in time said they were paying for the other customers' gains.
The appeals court acknowledged the proceeds were "ill-gotten gains," but said the Receiver could not pursue them now since the customers received the funds legally.
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