U.S. News

Stanford Receiver Rejects Motion Against Law Firm


The court-appointed Receiver in the Stanford case, Ralph Janvey, discounted last night's motion by Stanford's attorneys to disqualify the law firm of Baker Botts, one of Janvey's main law firms.

Stanford claims Baker Botts helped him set up the offshore bank at the heart of the alleged fraud, and as a result has a conflict of interest. But Janvey, echoing a statement by Baker Botts, said there was no conflict.

"The Receiver's full response will be set forth in his filed response(s) to the motions," Janvey said in a statement on his web site.

"The Receiver fully expects that both motions will be denied. In the meantime, the receivership will continue to work to preserve assets, liquidate assets into cash for future distribution, and prepare and categorize claims for development of a distribution plan for the Court's consideration," he said. 

The Texas law firm Baker Botts is denying it helped Texas Financier Allen Stanford create the financial empire that the firm is now helping dismantle.

The SEC sued Stanford in February alleging a massive Ponzi scheme, and a Dallas judge placed the firm in receivership. Dallas attorney Ralph Janvey is the court-appointed Receiver, and Baker Botts is one of his main law firms.

The firm has already billed millions of dollars in fees, and has been actively involved in closing Stanford's offices in an effort to preserve assets for investors. But according to the filing by Stanford's attorneys, Baker Botts helped create Stanford's offshore bank in the 1980s, and as a result has a conflict of interest.

Authorities allege that the bank, which started as Guardian International Bank in Montserrat and later became Stanford International Bank in Antigua, was at the heart of Stanford's alleged Ponzi scheme. The bank issued billions of dollars in certificates of deposit, which the Securities and Exchange Commission says were bogus.

In a statement Wednesday, a spokesperson for Baker Botts said the company has no record of ever representing Stanford, Guardian International Bank or Stanford International Bank.

The firm did admit to working with a related party about banking in the Carribbean from October 1985 to February 1986, but that work involved two meetings, 5.5 hours of time and an $850 fee.