Stanford Seeks Dismissal of SEC Case

The Securities and Exchange Commission's case against accused fraudster Allen Stanford should be dismissed, according to his attorneys, in part because the certificates of deposit at the heart of the alleged scheme were not securities.

Allen Stanford
Allen Stanford

The SEC has no jurisdiction in the case, the attorneys argued in a motion just filed in U.S. District Court in Dallas.

The SEC sued Stanford one year ago this week, alleging a massive Ponzi scheme involving bogus certificates of deposit issued by his offshore bank in Antigua.

The Commission knew about potential issues at Stanford since 1999, but didn't launch a formal investigation until 2005. Officials have said the case was hampered by questions about jurisdiction -- the very issue Stanford is raising now.

In addition to the issue of jurisdiction, Stanford civil attorney Shannon Conway argued that there is no evidence Stanford intended to commit fraud. Conway added that the case should not be tried in Dallas since there is no evidence Stanford defrauded anyone in the Northern District of Texas.

The new motion has no bearing on the criminal case against Stanford, who was indicted in June on 21 criminal counts. But a dismissal in the civil case could complicate efforts to return billions of dollars to Stanford's alleged victims.