| | |  Business News | February 2009 
Stanford Investors Ask U.S. Judge to Allow Lawsuits in Mexico
 Laurel Brubaker Calkins - Bloomberg
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| | From Mexico City to Caracas, hundreds of depositors lined up to pull money out of Stanford affiliated banks last week. (Reuters) | |
Two Mexican investors asked a U.S. judge for permission to sue R. Allen Stanford and his companies in Mexico after federal regulators accused the Texas financier of orchestrating an $8 billion fraud.
David Quintos and Diana Dimitiova told U.S. District Judge David Godbey in Dallas that they want to try to recover investment losses under Mexican securities laws. Mexico’s laws provide broader investor protections than U.S. laws, including the rights to sue for legal fees and “moral damages,” lawyer Randy Pulman said in a motion filed yesterday.
“It is hard to see how counsel for the government of the U.S. can simultaneously represent the interests of U.S. citizens and foreign nationals in this case,” Pulman wrote on behalf of the Mexican investors.
The U.S. Securities and Exchange Commission sued Stanford, three of his companies and two top aides on Feb. 16 for allegedly selling fraudulent certificates of deposit in Stanford International Bank, based in Antigua. Godbey froze Stanford’s corporate and personal assets, and appointed Dallas attorney Ralph Janvey as receiver.
“To the extent there is a limited pool of assets out of which recoveries will be paid,” Pulman said the receiver may choose to repay U.S. investors ahead of foreign nationals. “Every dollar of recovery allocable to foreign investors is a dollar not available to be paid to U.S. investors.”
U.S. Jurisdiction
Pulman, of San Antonio’s Pulman, Cappuccio, Pullen & Benson LLP, claimed U.S. regulators have no jurisdiction over the sale of allegedly fraudulent CDs by Stanford offices in Mexico, Panama, Venezuela and Ecuador. Quintos and Dimitiova purchased their CDs through a Stanford office in San Antonio.
John Nester, a spokesman for the SEC, didn’t immediately respond to a request for comment on the motion.
Former SEC lawyer Ed Tomko, now a white-collar defense attorney in Dallas, said today that Godbey should bar investors from suing Stanford in multiple countries.
“It would set up a situation where each country could come out and say its interests are contrary to the interests of every other country,” Tomko said in a phone interview. Judges in different countries might be able to claim control over the same Stanford assets, many of which are located overseas, he said.
As a matter of policy, court-appointed receivers don’t favor U.S. investors over foreign nationals, Tomko said.
“The receiver’s responsibilities are neither selective nor limited strictly to recovering for U.S. investors,” he said. “The U.S. receiver’s responsibility goes to all the investors, no matter where they are.”
The U.S. case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel(at)calkins.us.com. |
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