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SEC to Sue Securities Investor Protection Corporation

CNBC has confirmed that the Securities and Exchange Commission is making good on its threat to sue the Securities Investor Protection Corporation in an attempt to force SIPC to cover investors in Allen Stanford's alleged $7 billion Ponzi scheme.

The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC.
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The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC.

This is according to a spokesman for Sen. David Vitter (R-La.), who had been pushing for a lawsuit because of the large number of Stanford investors in his state.

“Many folks in Louisiana and along the Gulf region lost their life savings, and it’s time to get even tougher in our fight for the victims,” Vitter said in a statement issued by his office.

“I’ve been urging SIPC Chairman (Orlan) Johnson to act quickly for months, but the victims still haven’t received an up-or-down answer. This move by the SEC is encouraging and should significantly help the process.”

Neither the SEC nor SIPC has responded to a request for a comment. The Wall Street Journal, citing multiple sources, said the lawsuit would be filed as early as today.