Recent Developments - This page discusses the following topics:

Receiver Files Complaint Against Merge Healthcare, Inc. — On July 26, 2010, the Receiver filed a complaint against Merge Healthcare, Inc (“Merge”). The Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against Merge to recover $9 million that the Stanford Defendants transferred to Merge in February 2009. The see a copy of the Complaint, click here.

Stanford International Bank, Ltd. formerly held a substantial majority interest in an entity named Health Systems Solutions, Inc. and, since 1998, had invested approximately $40 million in HSS and its predecessor company Provider Solutions Corp. SIBL’s interest in HSS was just one of many illiquid private equity investments that were funded through the use of proceeds from the sale of fraudulent SIBL CDs.

In October 2008, HSS entered into an agreement to purchase Emageon, Inc. Stanford used SIBL to provide financing for the purchase and caused SIBL to divert $9 million in SIBL CD proceeds to fund an escrow account pursuant to a financing agreement related to the purchase. Up until a few days before the Receiver was appointed, that $9 million was still held in the escrow account. But when the purchase did not close by February 11, 2009, the $9 million held in escrow was released to Emageon per HSS's and Emageon's agreement. The failure to close, which occurred immediately prior to the Receiver’s appointment, was most likely due to the Stanford enterprise’s illiquid assets, lack of money, and insolvency. In 2009, the Court approved the Receiver’s sale of SIBL’s interests in HSS for $700,000.

On April 2, 2009, Emageon was acquired by Amicas, Inc.; on February 28, 2010, Amicas merged with Merge Healthcare Incorporated. The Receiver has asserted a fraudulent-transfer claim against Merge to recover the $9 million it received from SIBL. The Receiver has not alleged that Merge committed fraud. Rather, in this fraudulent-transfer action, the Receiver need only allege and prove that Merge received the funds from a Ponzi scheme. Payments from a Ponzi scheme are by definition payments made with intent to defraud other creditors, which is the essence of a fraudulent-transfer claim. The burden is on Merge to show that it both received the funds in good faith and that it provided reasonably equivalent value in exchange for the funds. In return for the $9 million payment, Stanford received nothing that is of any value to the creditors of the Stanford entities or the victims of the Stanford fraud. Because Merge cannot show that it provided any value — let alone reasonably equivalent value — in exchange for the $9 million, the Receiver is entitled to the return of such funds as a matter of law, irrespective of good faith.

On July 16, 2010, the Receiver filed a Complaint against certain former Stanford employees who invested in Stanford International Bank, Ltd. (“SIBL”) CDs. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against 77 former employee investors whom he has identified as having received CD proceeds from SIBL. Collectively, these 77 former employee investors received over $27 million in such CD proceeds. To see a copy of the Complaint, click here.

Receiver's Interim Report Regarding Status of Receivership, Asset Collection and Ongoing Activities - On July 1, 2010, the Receiver filed a report with the Court that discusses the status of the Receivership, the Receivership's asset collection efforts and ongoing activities. To view the report, click here.

Update on Return of Political Campaign Contributions - To view updated information on political campaign contributions that have been returned to the Receivership Estate, click here.

Court Issues Order Granting Preliminary Injunction - On June 10, 2010, the Court issued an order granting the Receiver’s application for a preliminary injunction that enjoins certain former Stanford employees from removing approximately $24 million in funds currently frozen in Stanford brokerage accounts located at Pershing LLC and JP Morgan Clearing Corp., unless funds in the accounts exceed the total of: (1) commissions earned from the sale of Stanford International Bank, Ltd. (SIB) certificates of deposit; (2) SIB quarterly bonuses; and (3) branch managing-director quarterly compensation. The Receiver is currently pursuing fraudulent transfer claims against these former employees and, if successful, would use such frozen accounts to satisfy any settlements reached or judgments rendered in the Receiver’s favor. (Click here to view the order.)

Receiver Files Additional Complaint Against Certain Stanford Investors - On May 18, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 65 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest or other payments. Collectively, these 65 investors received over $41.8 million in total CD Proceeds, with over $6.9 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 844 investors who received funds in excess of their SIBL investments. All combined, these 844 investors received over $1.23 billion from SIBL, with over $216.1 million of the total representing amounts they received in excess of their investments. The Receiver continues to encourage all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 57 settlements totaling over $3.7 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Notice of Public Auction for Sale of 5050 Westheimer, Houston, Texas - On May 18, 2010, the Receiver entered into a stalking horse contract for the sale of 5050 Westheimer, Houston, Texas. Pursuant to the Order Approving Procedures for Sales of Real Property by the Receiver, entered by the Court on January 26, 2010, the Receiver is required to provide notice of the proposed sale on the Receivership website for at least four weeks prior to the sale. To see a copy of the notice, click here.

Receiver Files Additional Complaint Against Certain Stanford Investors - On May 7, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 41 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments Ñ that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 41 investors received over $18.3 million in total CD Proceeds, with over $3.2 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 784 investors who received funds in excess of their SIBL investments. All combined, these 784 investors received over $1.2 billion from SIBL, with over $209.6 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver continues to encourage all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 52 settlements totaling over $3.5 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Receiver Files Additional Complaint Against Certain Stanford Investors - On April 27, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 34 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 34 investors received over $15.1 million in total CD Proceeds, with over $2.3 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 745 investors who received funds in excess of their SIBL investments. All combined, these 745 investors received over $1.18 billion from SIBL, with over $206.4 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver continues to encourage all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 50 settlements totaling over $3.3 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Receiver Files Complaint Against Interim Executive Management, Inc. - On April 23, 2010, the Receiver filed a complaint against Interim Executive Management, Inc. (IEM), a management consulting company with offices in Germantown, Tennessee. The Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against IEM to recover over $4 million that the Stanford Defendants transferred to IEM between 2006 and 2009. To see a copy of the Complaint, click here.

Receiver Files Application for TRO, Preliminary Injunction, and Writ of Attachment Concerning Accounts of Former Stanford Employees - On April 19, 2010 the Receiver filed an Application which seeks to prevent the withdrawal or transfer of assets held in accounts owned by the former Stanford employees named in the Receiver's Second Amended Complaint Against Former Stanford Employees. Those accounts, which are held at Pershing, SEI, JPMCC, and Stanford Coins & Bullion, hold assets worth over $24 million, and represent the Receiver's best chance to recover on his fraudulent-transfer and unjust-enrichment claims against the former employees who own the accounts; those claims are worth more than $139 million. As set forth in the Application, the Receiver is likely to recover on his claims against these former employees--all of whom profited directly from the sale of SIBL CDs to investors -- and recovering these funds from the former employees will assist in the Receiver's efforts to provide compensation to the victims of the Stanford fraud and others with claims against the Estate. To view a copy of the Application, click here.

Receiver files additional Complaint Against Certain Stanford Investors - On April 8, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 43 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 43 investors received over $19.6 million in total CD Proceeds, with over $4 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 715 investors who received funds in excess of their SIBL investments. All combined, these 715 investors received over $1.17 billion from SIBL, with over $204.4 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver continues to encourage all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 46 settlements totaling over $3.14 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Notice of Public Auction for Sale of 20 Casuarina, Coral Gables, Florida - On March 29, 2010, the Receiver entered into a stalking horse contract for the sale of 20 Casuarina, Coral Gables, Florida. Pursuant to the Order Approving Procedures for Sales of Real Property by the Receiver, entered by the Court on January 26, 2010, the Receiver is required to provide notice of the proposed sale on the Receivership website for at least four weeks prior to the sale. To see a copy of the notice, click here.

Receiver files additional Complaint Against Certain Stanford Investors - On March 29, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 36 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 36 investors received over $15.8 million in total CD Proceeds, with over $3.6 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 674 investors who received funds in excess of their SIBL investments. All combined, these 674 investors received over $1.153 billion from SIBL, with over $200.5 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver encourages all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 44 settlements totaling over $3.07 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Stanford Receiver and Victims Announce Agreement on Formation of Official Committee to Represent Victims' Interests - On March 30, 2010, the Stanford Receiver and victims of the Stanford "ponzi" scheme announced an agreement to form an official committee to represent victims' interest. To see a copy of the press release, click here.

Receiver files additional Complaint Against Certain Stanford Investors - On March 15, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 36 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments – that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 36 investors received over $17.3 million in total CD Proceeds, with over $3.6 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 645 investors who received funds in excess of their SIBL investments. All combined, these 645 investors received over $1.144 billion from SIBL, with over $197.4 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver encourages all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Receiver files Complaints Against Wealth Management Services, Ltd. and additional Stanford Investors - On March 8, 2010, the Receiver filed a Complaint Against Wealth Management Services, Ltd. (WMSL), a consulting company owned and operated by David Nanes, a former Stanford financial advisor. The Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against WMSL to recover over $9.8 million in bonus payments and consulting, marketing, branding, and other fees that the Stanford Defendants transferred to WMSL. To see a copy of the Complaint, click here.

On the same day, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 62 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these 62 investors received over $38 million in total CD Proceeds, with over $5.6 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

In total, the Receiver has sued 612 investors who received funds in excess of their SIBL investments. All combined, these 612 investors received over $1.1 billion from SIBL, with over $193 million of the total representing amounts they received in excess of their investments. The Receiver's investigation is ongoing, and he expects to identify additional investors who received excess SIBL funds. The Receiver encourages all investors who are interested in discussing settlement to contact the Receiver's counsel to arrange for the return of the funds they received in excess of their investments.

Thus far, the Receiver has finalized 37 settlements totaling over $2.7 million and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

Receiver files additional Complaint Against Certain Stanford Investors - On March 1, 2010, the Receiver filed an additional Complaint Against Certain Stanford Investors. Specifically, the Receiver asserted fraudulent-transfer and, in the alternative, unjust-enrichment claims against an additional 54 investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments Ñthat is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these investors received over $30 million in total CD Proceeds, with over $5.9 million of the total representing amounts they received in excess of their investments. To see a copy of the Complaint, click here.

Judge Orders Carlos Loumiet and Hunton & Williams to Produce Information to Receiver - On March 1, 2010, today, the Court entered an order compelling Mr. Carlos Loumiet and the law firm of Hunton & Williams LLP to deliver to the Receiver all files and billing records related to the legal services rendered on behalf of various foreign Stanford entities including, among others, Stanford International Bank, Ltd. The Receiver believes that the information contained within such records may assist with asset identification and recovery efforts. To view a copy of the order, click here.

Status Gagosian Litigation - Based on the orders issued on February 26, 2010, the Court will address the substantive claims of each of the affected parties in due course and in the separate lawsuit filed by Gagosian Gallery. The Court denied the requests for interim or expedited relief made by the Gallery and the Receiver in the SEC action, indicating that multiple factual issues need to be resolved before final rulings can be made. The Court determined that there is no immediate threat of irreparable harm that would justify granting emergency relief before the factual disputes are resolved.

United Kingdom Court Order - On February 25, 2010, the English Court of Appeal ruled that the Antiguan Liquidators are the recognized foreign representatives of Stanford International Bank (SIB) in the United Kingdom, but that SIB funds located in the United Kingdom are subject to a restraint order obtained by the UK Serious Fraud Office at the request of the United States Department of Justice.

Ralph Janvey, the US court-appointed Receiver, agrees with the Court of Appeal’s decision upholding the restraint order. That order preserves the UK funds, subject to further legal proceedings, so that the funds ultimately can be transferred to the US Department of Justice and distributed to SIB investors.

The US Receiver disagrees with the English Court of Appeal’s decision to recognize the Antiguan Liquidators but not the US Receivership. The Court of Appeal declined to recognize the US Receiver as a foreign representative of SIB because, it concluded, the US receivership is not an insolvency proceeding. The Court's conclusion is wrong because the US Receivership clearly is an insolvency proceeding. SIB is dramatically insolvent, it is being liquidated for the benefit of creditors under the supervision of the United States District Court for the Northern District of Texas, and a distribution ultimately will be made pursuant to a court-approved distribution plan.

The US Receiver also disagrees with the English Court of Appeal’s ruling that SIB’s “center of main interests” is Antigua, not the United States. In arriving at this conclusion, the Court of Appeal incorrectly declined to consider that SIB was one of many Stanford entities used in the perpetration of a massive Ponzi scheme that was orchestrated from the United States and US territories. Indeed, under US law an entity’s principal place of business (equivalent to “center of main interests”) is where its “nerve center” is. The US Supreme Court reiterated that rule just this week. SIB’s nerve center was the United States.

The US District Court appointed the US Receiver to take possession of all SIB assets wherever situated, and the US Receiver became involved in the UK litigation only after the Antiguan Liquidators sought recognition in the UK so as to obtain more than $100 million in SIB funds that are on deposit in the UK. In order to preserve this large sum for distribution in a US-administered proceeding, it was necessary for the U.S. Receiver to oppose the Antiguan Liquidators’ application for recognition and to present the US Receivership as the appropriate vehicle for winding-up SIB’s affairs and fairly distributing its assets.

The US Receiver hopes that on-going discussions with the Antiguan Liquidators will lead to a resolution of the various disputes concerning SIB’s assets. A resolution would benefit investors.

Receiver files Complaint Against Certain Stanford Investors - On February 23, 2010, the Receiver filed a Complaint Against Certain Stanford Investors. The Stanford Investors named in the Complaint were previously named in the Receiver's February 18th and February 22nd supplemental complaints. To see a copy of the Complaint, click here.

Receiver Files Lawsuit to Enforce Return of Political Contributions - In furtherance of his court-ordered duty to take control of all assets of the Receivership Estate, the Receiver filed a lawsuit on Friday, February 19, 2010 against the Democratic Senatorial Campaign Committee, Inc.; the National Republican Congressional Committee; the Democratic Congressional Campaign Committee, Inc.; the Republican National Committee; and the National Republican Senatorial Committee (collectively, the “Committee Defendants”).

While operating a massive Ponzi scheme, Allen Stanford, James Davis, and the Stanford Financial Group contributed more than $1.8 million of their ill-gotten gains to a variety of political organizations and candidates. The Committee Defendants received more than $1.6 million in funds that were ultimately traceable to money that investors paid for the purchase of fraudulent Stanford CDs. The Committee Defendants furnished no consideration for the funds they received. Consequently, they have no legitimate right to retain the funds, and the Receiver is entitled to the return of the funds for the benefit of claimants injured by the fraud orchestrated by Stanford, Davis, and others.

Before filing the lawsuit, the Receiver had made written requests to the Committee Defendants for return of the funds, first in February 2009, and again in February 2010. The Committee Defendants, however, ignored the Receiver’s requests, and, as a result, the Receiver was forced to file the lawsuit to obtain the return of the funds for the benefit of claimants. To view a copy of the complaint, click here.

Receiver files Supplemental Complaints Against Certain Stanford Investors and Former Stanford Employees -- On February 18, 2010, the Receiver filed a Supplemental Complaint Against Certain Stanford Investors, in supplement to the Receiver’s First Amended Complaint Against Certain Stanford Investors. Like the First Amended Complaint, the supplemental complaint asserts claims against the investors under fraudulent-transfer law and equitable principles of unjust enrichment. Specifically, the Receiver has asserted claims against 257 additional investors whom he has identified as having received CD Proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments — that is, investors who received not only amounts equal to their principal investment, but also additional amounts in the form of purported interest payments. Collectively, these investors received over $508 million in total CD Proceeds, with over $87 million of the total representing amounts they received in excess of their investments. To see a copy of the supplemental complaint against the investors, click here.

On the same day, the Receiver also filed a Supplemental Complaint Against Former Stanford Employees. This supplemental complaint was filed in supplement to the Receiver’s Second Amended Complaint Against Former Stanford Employees. Like the Second Amended Complaint, the supplemental complaint asserts fraudulent-transfer and unjust-enrichment claims against the former employees. In particular, the supplemental complaint seeks to recover from 99 former Stanford employees Proceeds they received from CDs in which they invested, in addition to the other categories of CD Proceeds identified in the Second Amended Complaint — namely Loans, SIBL CD Commissions, SIBL Quarterly Bonuses, PARS Payments, Branch Managing Director Quarterly Compensation, and Severance Payments. All combined, these 99 employees received over $51 million in Proceeds from their CDs, and 26 of them collectively received over $1 million in Proceeds in excess of their total CD investments. To see a copy of the supplemental complaint against the former employees, click here.

Receiver Sends Settlement Offers to Additional Stanford Investors – The Receiver has identified 185 additional investors who received CD proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments. Like the defendants the Receiver sued in his December 7, 2009 First Amended Complaint Against Certain Stanford Investors, these 185 investors received not only amounts equal to their principal investment, but also excess amounts in the form of purported interest payments. The funds used to make payments to these investors came from investments made by other investors.

Before filing a lawsuit against these 185 investors, the Receiver has sent them correspondence offering to settle the claims in exchange for return of the payment of the amounts they received in excess of their investments in SIBL CDs. Investors who intend to accept the Receiver’s proposal should contact the Receiver’s counsel to arrange for settlement.

Thus far, the Receiver has finalized 34 settlements totaling approximately $2.6 million, is in the process of finalizing additional settlements for over $500,000, and is in discussions with other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments.

The Receiver's investigation is ongoing, and he expects to identify other investors who received from SIBL amounts in excess of their investments. The Receiver encourages all investors who received proceeds in excess of their CD investments and who are interested in discussing settlement to contact the Receiver's counsel, regardless of whether they have received settlement correspondence from the Receiver.

Court Approves Agreement Amongst SEC, Receiver and Examiner regarding All Outstanding Fee Applications - On February 3, 2010, the Court approved a proposed order submitted by the SEC, the Receiver and the Examiner with regard to all fee applications pending, by both the Receiver and the Examiner. Click here for a copy of the order.

Process for Release of Coins and Bullion - On January 19, 2010, the Receiver posted information regarding the release of coins and bullion held by the Receivership to Stanford Coins and Bullion (SCB) customers in accordance with the recent Court order granting in part the Receiver and Examiner’s joint motion regarding coin and bullion assets. To review a copy of this information, click here.

2009 W-2 forms for Employees - W-2 forms representing wages/income earned in 2009 for current and former Stanford employees are expected to mail no later than the end of January, 2010. If your address has changed, please contact the Receivership at 713.964.6301 or toll free at 866.964.6301.

Transfer of Remaining Brokerage Accounts Not Subject to Court Freeze - On November 13, 2009, the Court entered an Order granting the Receiver’s Motion seeking approval to transfer any remaining Stanford Group Company brokerage accounts that are no longer subject to the Court's freeze order to Dominick & Dominick LLC. Both Stanford Group Company and Dominick and Dominick LLC use Pershing, LLC as their clearing agent.

The transfer applies to Stanford Group Company brokerage accounts that have been released but that have not been transferred away from Stanford Group Company. On November 27, 2009, the Receiver sent a notice to all customers whose accounts were subject to this transfer. These Stanford Group Company customers were advised that if they did not transfer their accounts to a firm of their choice by January 13, 2010 , their accounts would be transferred to Dominick and Dominick LLC, effective January 20, 2010.

Customer transactions and other account servicing needs should be directed to Dominick and Dominick at 800-221-2869 beginning Wednesday, January 20, 2010. In addition, Dominick and Dominick LLC will be contacting each customer to assist in the transition.

Settlements of Claims Against Certain CD Investors - The Receiver is currently pursuing fraudulent-transfer and unjust-enrichment claims against 198 Stanford investors who received over $93.3 million in proceeds in excess of their SIBL CD investments. In November 2009, the Receiver began contacting numerous Stanford investors with offers to settle the claims against them in exchange for payment of the amounts they received in excess of their SIBL CD investments. Thus far, the Receiver has finalized more than 30 settlements totaling over $1.8 million, is in the process of finalizing additional settlements for over $1 million, and is in discussions with many other investors or their counsel to achieve further settlements. The investor funds that the Receiver recovers in these settlements will help provide compensation to investors who suffered significant or total losses of their SIBL CD investments. The Receiver encourages all investors who received proceeds in excess of their CD investments and who are interested in discussing settlement to contact the Receiver's counsel.

Cancellation of Chapter 15 Hearing (Vantis) - The District Court has cancelled the previously scheduled hearing on the motion of Peter Wastell and Nigel Hamilton-Smith, Antiguan-appointed liquidators of Stanford International Bank, Ltd. (“SIBL”), for recognition, under Chapter 15 of the United States Bankruptcy Code, as SIBL’s representatives in the United States. The hearing had been scheduled to take place on January 21, 2010. To view a copy of the Court's order, click here.

Order Regarding Coins and Bullion - On January 5, 2010, the Court granted in part the Receiver and Examiner's joint motion regarding coin and bullion assets. To review a copy of the order, click here. The Receiver is preparing for the release of coins and bullion held by the Receivership to Stanford Coins and Bullion (SCB) customers in accordance with the order. Additional information regarding this process will posted on the Receiver's website as soon as it is available. Please do not contact the Court for information with respect to the return of your coins or bullion.

Cooperation Offer - On December 11, 2009, the Receiver sent a counter-offer to Vantis regarding cooperation in order to resolve ongoing disputes over assets worldwide for the benefit of claimants against Stanford International Bank, Ltd. Vantis’ proposal and the Receiver’s responsive proposal can be found here and here.

Receiver Files Amended Complaint as to Certain Stanford Investors - On Monday, December 7, 2009, the Receiver filed his First Amended Complaint as to Certain Stanford Investors. This amended complaint is in response to the Fifth Circuit's ruling on November 13 that the Receiver cannot pursue claims against investors under a relief defendant theory. The amended complaint asserts claims against certain Stanford investors under fraudulent transfer law and equitable principles of unjust enrichment. Specifically, the Receiver has asserted claims against investors whom he has identified have received CD proceeds from Stanford International Bank, Ltd. (SIBL) in excess of their total investments -- that is, investors who received not only amounts equal to their principal investment, but additional amounts in the form of purported interest payments. The funds used to make payments to these investors simply came from investments made by other investors. The Receiver's investigation is on-going and he expects to identify other investors who received from SIBL amounts in excess of their investments.

Prior to filing this amended complaint, the Receiver contacted those investors named in the complaint and offered to settle the claims against them in exchange for the return of the payment of the amounts they received in excess of their investments in SIBL CDs. Some investors accepted the Receiver’s proposal prior to the filing of the amended complaint, and the Receiver is in discussions with many other investors, or their counsel, and expects to conclude additional settlements with a number of the Stanford investors named in the amended complaint. Any investor with whom the Receiver concludes a settlement will be dismissed from the complaint.

The Receiver encourages any investor named as a defendant who is interested in discussing settlement to contact the Receiver's counsel if the investor has not already done so.

The funds obtained from these settlements will be an important source of compensation to those investors who have incurred significant losses, and in thousands of cases a total loss, of their investment in SIBL CD's.

To see a copy of the amended complaint, click here.

Order Regarding IRS's "John Doe" Summons - On December 3, 2009, the Court granted the Internal Revenue Service ("IRS") permission to serve the Receiver with a "John Doe" summons seeking information about U.S. investors in Stanford CDs, stating that there is a reasonable basis for the IRS to believe that Stanford investors may fail or may have failed to comply with tax laws. To view a copy of the Order, click here.

Chapter 15 Hearing (Vantis) -- The District Court has scheduled a hearing on the motion of Peter Wastell and Nigel Hamilton-Smith, Antiguan-appointed liquidators of Stanford International Bank, Ltd. (“SIBL”), for recognition, under Chapter 15 of the United States Bankruptcy Code, as SIBL’s representatives in the United States. Mr. Wastell and Mr. Hamilton-Smith seek to have SIBL removed from the US-administered receivership and instead liquidated through a proceeding administered by the Antiguan judiciary. The US Receiver, Mr. Janvey, opposes the motion, as does the Securities Exchange Commission. The hearing is scheduled for two days beginning at 9 AM, Thursday, January 21, 2010, in the courtroom of Judge David Godbey, 1100 Commerce Street, Dallas, TX 75242. To view a copy of the Court's order, click here.

Release of Remaining Frozen Investor Accounts Following Fifth Circuit Ruling Regarding Claw Backs - Following the ruling of the 5th Circuit Court of Appeals on Friday, November 13, 2009, investor accounts, previously subject to the Freeze Order, are now available for release. The ruling does not affect the freeze which remains in effect as to accounts held by former Stanford employees and brokers.

Stanford Group Company (SGC) Accounts - To transfer an eligible brokerage account away from Stanford Group Company, you need to contact a new brokerage firm and open a new account with them. You will need to verify that the new firm can take all of the positions in your account, including mutual funds and annuities, you wish to transfer. As part of the account opening process, one of the forms you will be asked by your new firm to fill out is a transfer form referred to as an ACATS form. Once that has been completed, your new firm may begin the account transfer process by presenting the completed ACATS form to Pershing or J.P. Morgan through the ACATS system. If your account is an IRA, please contact your new firm regarding advice as to how to set up a new IRA account so that you may effect the transfer without incurring penalties. The Receivership Estate will absorb the fees associated with the ACATS transfer process, as well as any maintenance and termination fees associated with the transfer of any IRAs. However, the Receivership will not pay any fees charged by your new financial institution.

Stanford Trust Company (STC) – IRA/Brokerage/Agency/Custody Accounts - To transfer such an account you must contact a new trust company, brokerage firm or other financial institution and open a new account with them. As part of the account transfer process, one of the forms your new firm may ask you to fill out is a transfer form referred to as an ACATS form. Once that has been completed, your new firm may begin the account transfer process by presenting the completed ACATS form to SEI Private Trust Company (“SEI” is a private trust company not affiliated with the Stanford companies that acts as the STC asset custodian) through the ACATS system. If your account is an IRA account, please contact your new firm regarding the procedures for opening a new IRA to ensure that when you transfer your STC IRA you will not trigger any tax penalties related to an inadvertent early withdrawal.

Stanford Trust Company (STC) and other Fiduciary Accounts - To transfer your STC trust or other fiduciary account for which STC served as a trustee or other fiduciary, whether sole or joint, you should contact a new trust company or other financial institution you wish to serve as successor trustee or fiduciary. You should confirm that the new entity is authorized to serve as a trustee or fiduciary and discuss with its representatives the documents required to transfer your trust or other fiduciary account. You may also want to discuss with your attorney the documents required to appoint a successor trustee or other fiduciary and the procedures necessary to transfer your account. A successor trustee or fiduciary must be appointed in accordance with the provisions of the governing trust or fiduciary instrument, which often expressly grants the power to appoint a successor to certain individuals. In some cases, if the trust instrument does not address the power to appoint a successor trustee or fiduciary, court approval will be necessary to transfer your trust or other fiduciary account to a successor trustee or fiduciary. As part of the account transfer process, your new trust company, or, if applicable, your legal counsel, should prepare the necessary documentation required to appoint a successor trustee or fiduciary and to transfer your assets to such institution. All signatures must be notarized by a notary public, and transfer requests involving account assets must be signature guaranteed with a Medallion Stamp. Once these documents are complete, they should be sent to the following address:

Stanford Trust Company
5050 Westheimer
Houston, TX 77056

This documentation will be reviewed, and if proper authority and notarized signatures are present as required by the individual trust document, the Receiver will instruct SEI Private Trust Company (“SEI” is a private trust company not affiliated with the Stanford companies that acts as the STC asset custodian) to transfer the assets to your new account at your new financial institution.

If you wish to close your account (as opposed to moving it to a new institution) you should contact the Receiver’s representatives and inform them that you wish to close your account and receive a distribution of your account.

If you require further assistance, please call the numbers established by the Receivership (1-866-964-6301 or 713-964-6300).

Opinion of Appeals Court from Hearing Regarding Claw Backs - On November 13, 2009, the Fifth Circuit Court of Appeals issued its opinion from the hearing regarding clawbacks. Click here for a copy of the opinion.

Transcript of Appeals Court Hearing Regarding Claw Backs -- The Fifth Circuit Court of Appeals held a hearing on November 2, 2009. Click here for a transcript of such hearing. When a decision has been issued a notice of such decision will be posted on the website.

Receiver’s Interim Report on Assets and Cost Reductions - On October 28, 2009, the Receiver filed a report with the Court that discusses the Receivership's asset collection efforts to date. To view the report, click here.

Stanford University Trademark Litigation - On September 24, 2009, the Receiver entered into a Settlement Agreement and Mutual Release with The Board of Trustees of The Leland Stanford Junior University, pursuant to which the parties settled and resolved all disputes, differences, claims and counterclaims asserted in trademark infringement litigation pending between the parties. Stanford Financial Group Company, Stanford Group Company, their entity affiliates, parent and subsidiary companies, including, but not limited to, Stanford Investment Bank and Stanford Trust Company, are not, and have never been, related or affiliated in any way with Stanford University.

Canadian Court Replaces Vantis with US Receiver and Rebukes Antiguan Liquidators for Misconduct - On September 11, 2009, the Superior Court in Montreal, Quebec issued an order recognizing the U.S. Receivership as the appropriate legal insolvency proceedings for Stanford entities including SIB and recognizing Ralph Janvey as the foreign representative for those persons and entities. As part of Mr. Janvey’s recognition and as required by Canadian law, the court appointed a firm with insolvency practitioners licensed in Canada, Ernst & Young, to serve as ancillary receiver in Canada for these entities and to work in coordination with Mr. Janvey.

The Canadian court also revoked the prior recognition of Nigel Hamilton-Smith and Peter Wastell of Vantis PLC (“Vantis”). The prior recognition of Vantis was revoked in part because of various improper acts that the court found to have been undertaken by or on behalf of Vantis including acts taken without prior approval from the court or notifying the Quebec financial regulator.

The judgments recognizing the US Receiver and revoking Vantis’ appointment have now been translated and were filed with the U.S. District Court with a request for judicial notice. You can access the order revoking Vantis’ appointment here and you can access the order recognizing the US receivership here.

Applications by Receiver for Fees and Expenses -- On May 15, 2009 and August 4, 2009, the Receiver filed with the Court applications for approval of payment of fees and expenses to 14 firms that have rendered professional services on behalf of the Estate through May 31, 2009. On June 19, 2009 and September 1, 2009, the Receiver filed replies in response to objections to the fee applications. To view copies of these filings, click here. On September 10, 2009, the Receiver's applications were granted in part and denied in part. To view a copy of the Minute Entry in the Court's records, click here.

Superseding Criminal Indictment in Florida Obstruction Case - On September 10, 2009, a superseding indictment was filed in the Southern District of Florida against Bruce Perraud, a former global security specialist at the Ft. Lauderdale, Florida, office of Stanford Financial Group (SFG), headquartered in Houston, Texas, and against Thomas Raffanello, the former global director of security at SFG’s Ft. Lauderdale office, adding defendant Raffanello and two charges to the original May 2009 indictment of Perraud. Perraud and Raffanello each are charged with one count of conspiracy to obstruct a Securities and Exchange Commission (SEC) proceeding and to destroy documents in a federal investigation (Count 1: 18 U.S.C. § 371), one count of obstruction of a proceeding before the SEC (Count 2: 18 U.S.C. § 1505), and one count of destruction of records in a federal investigation (Count 3: 18 U.S.C. § 1519). The case is pending before Judge William J. Zloch, United States District Court Judge for the Southern District Florida, 299 East Broward Boulevard, Ft. Lauderdale, Florida. To view a copy of the superseding indictment, click here. For further details on this case or any of the Stanford-related cases, please go to www.usdoj.gov/criminal/vns.

Lawsuit Against Financial Advisors -- On August 26, 2009, the Receiver filed a supplemental complaint in his previously filed lawsuit that seeks to recover commissions, front-end loans and other CD-related compensation that Stanford Group Company paid to certain former financial advisors. These amounts were paid to the financial advisors as compensation for soliciting their clients to purchase certificates of deposit from Stanford International Bank, Ltd. As supplemented, the complaint now seeks to recover approximately $134 million from 253 former financial advisors.

The lawsuit alleges that the brokerage services performed by the financial advisors in exchange for the compensation payments were not legitimate and did not confer any benefit on their customers, and therefore that the financial advisors have no rightful ownership interest that could justify their retaining possession of the funds.

The lawsuit seeks recovery of the funds for the benefit of the Receivership Estate on the basis that the amounts were fraudulently transferred, as well as on the relief defendant theory previously asserted. The 253 financial advisors named in the lawsuit each received $50,000 or more in compensation related to CD sales over the two-year period prior to the Receivership.

To view a copy of the supplemental complaint, click here.

Unavailability of SIPC Coverage for SIB CDs -- The Receiver has had discussions with the Securities Investor Protection Corporation to determine whether SIPC coverage is available for Stanford International Bank Ltd. CDs. Unfortunately, no such coverage is available. To view a copy of the August 14, 2009 letter from SIPC to the Receiver explaining why coverage is not available, click here. To view the Receiver's letter to SIPC requesting a statement of its position, click here. To view FAQs on this subject and on related issues, such as why no coverage is available from the Federal Deposit Insurance Corporation and how the Madoff situation differs from Stanford, click here.

Fifth Circuit Grants Receiver's Motions To Extend Asset Freeze During Appeal of Claw Back Decision -- On August 11, 2009, the U.S. Fifth Circuit Court of Appeals granted the Receiver's motions to extend the asset freeze over certain Stanford Group Company and Stanford Trust Company customer accounts that remain frozen. The extension maintains the asset freeze during the Receiver's appeal of the July 31 District Court determination that claw backs for CD principal are not allowed under the law. See the discussion of the District Court's decision set forth below. Final briefing on the Receiver's appeal is due on October 14, 2009, and oral argument has tentatively been scheduled for November 2, 2009. To view a copy of the Fifth Circuit's orders, click here.

Receiver Motion To Extend Asset Freeze During Appeal of Claw Back Decision -- On August 7, 2009, the Receiver filed a notice of appeal with the U.S. Fifth Circuit Court of Appeals in order to try to overturn the District Court’s determination that claw backs for CD principal are not allowed under the law. The Receiver also filed a motion to extend, during the time the appeal is being considered, the asset freeze over certain Stanford Group Company and Stanford Trust Company customer accounts that remain frozen. The District Court had determined that the Receiver could pursue claw backs for CD interest payments but not for CD principal amounts that had been previously paid out, as described below. If the appellate court does not extend the freeze, then the frozen accounts must be released effective August 13, 2009, except that accounts owned by Stanford related persons and amounts in investor accounts related to clawback claims for CD interest would continue to be frozen under the District Court’s order. To view a copy of the Receiver's motion, click here.

Receiver Statement Regarding Court Hearing Addressing Clawbacks -- The Court held a hearing at 5:00 pm, on Friday, July 31, 2009 regarding: (1) the Receiver's July 28 motion to establish expedited and summary proceedings for consideration of the Receiver's amended complaint regarding claw backs, (2) the Receiver's related motion to extend the account freeze on certain customer accounts and (3) the SEC's motion to amend the Receiver's Order of Appointment to prohibit the Receiver from pursuing claw backs.

The Court denied the SEC's motion to prohibit the Receiver from pursuing claw back claims. Although the Court also denied the Receiver's motion for an extension of the freeze (except with regard to interest payments that may be held), the Court temporarily stayed (suspended) its previous order vacating the freeze (i.e. mandating the automatic release of all frozen accounts on August 3, 2009) for a ten day period following the entry of an order reflecting his intentions as articulated at the hearing so that the Receiver could appeal the order if he so chose. The freeze with respect to former Stanford financial advisors, certain former Stanford employees and persons indebted to the Stanford entities which was continued in the June 29 Order was not affected by the Court's ruling.

The Court essentially ruled that it would allow claw back claims against investors only for purported interest payments. The Court stated that the law as to the ability to bring claw back claims against innocent investors for principal was arguably unclear but that the appellate court may have a different view as to the proper interpretation of the law in these circumstances. The Court remarked that, if the Fifth Circuit agreed with the Receiver's interpretation of the law, then the pursuit of such claims is necessary in order to meet the Receiver's duty to maximize the assets for distribution to Stanford victims. Accordingly, the Receiver will file an appeal with the Fifth Circuit on an expedited basis regarding the ability to pursue claw back claims for principal.

Activities regarding the pursuit of claw back claims against investors for principal will cease until such time as the Fifth Circuit provides its guidance with regard to whether or not these claims may be pursued through treatment of such investors as relief defendants.

To view the Court's order regarding the account freeze in general, click here.

Motion Regarding Coin and Bullion Claims and Assets -- On July 29, 2009, the Receiver and the Examiner filed a joint motion seeking authority for the Receiver to take certain actions regarding coin and bullion claims and assets. The motion identifies six different categories of coin and bullion claims and assets, and requests authority to address each category. The proposed actions to be taken depend on the category of assets, as described in the motion. To view a copy of the motion, click here.

Receiver Files Amended Complaint To Recover $925 Million of CD Related Funds -- On July 28, 2009, the Receiver filed papers with the Court seeking the return to the Receivership Estate of approximately $925 million of funds related to Stanford International Bank Ltd. certificates of deposit. The Receiver’s goal in pursuing these claims is to achieve equity for all investors by maximizing the assets of the Estate.

The $925 million consists of (1) approximately $40 million of fees, commissions and loans related to CDs from 66 former Stanford financial advisors, (2) approximately $373 million of purported CD redemption or interest payments from more than 500 SIB account holders who have Stanford Group Company or Stanford Trust Company accounts that are frozen under the Court's February 2009 order (these frozen accounts contain approximately $300 million of assets that would be available to satisfy the claims against these account holders), (3) approximately $18 million of such funds from 40 account holders who have signed agreements with the Receiver regarding release of their accounts and have wired funds into the Receiver's escrow account and (4) approximately $494 million from the 49 other SIB account holders that received the largest amounts of purported CD redemption or interest proceeds after January 1, 2008 that are not covered by one of the categories above (these defendants do not have frozen accounts at Stanford Group Company or Stanford Trust Company). The 66 former financial advisors and certain of the other relief defendants were named as defendants in prior complaints, which are superseded by the amended complaint filed July 28.

The persons listed in the amended complaint are a very small percentage of the more than 20,000 investors who have thus far received little or nothing from their investment in SIB CDs. Upon recovery, these funds will be shared by all CD investors, including those from whom the funds are recovered.

Many people say they do not understand why the Receiver would seek to recover funds from persons who may have been victims themselves of the Stanford fraud. As explained in the filings, the Receiver believes the redemption, interest and other payments were made with money stolen by the Stanford entities from other CD holders and therefore should be equitably distributed among all the victims.

CD customers who received redemptions or interest payments may believe the proceeds were a return of an investment placed with what they thought was a legitimate bank, Stanford International Bank Ltd. In reality, the money that CD customers received was not their money, was not a return of their investment, and was not generated by any of SIB’s other business ventures. The funds used to pay purported CD interest and redemptions were simply money that was stolen from the thousands of CD holders who were deceived into purchasing CDs and who, by chance, or as the result of sales tactics by brokers, had not withdrawn funds from SIB as of the date the Receivership was put in place.

If recovered in full, the $925 million in the aggregate would represent the Estate’s largest single asset, significantly greater in size than the amount likely to be recovered from all other assets of the Estate combined, based on information currently available to the Receiver. The Receiver believes the Court’s order requires the claims to be pursued in order to maximize assets available for distribution to all victims of the fraud.

The Receiver intends to evaluate and pursue other similar claims based on a cost/benefit analysis, in which the costs to the Estate of pursuing a claim are compared to the benefits to be achieved (considering both the likelihood of recovery and the amount to be recovered if successful).

As detailed in the filings, the claims for the return of funds are fully supported by case law and have been upheld under the established legal principle of “equality is equity."

To view the amended complaint, click here.

In many cases, the funds sought to be recovered are held in customer accounts that are subject to the current account freeze; in other cases, the funds are not held in frozen accounts. The Receiver also filed related papers with the Court seeking to extend the account freeze on all currently frozen accounts that are the subject of the amended complaint until the Court determines whether the funds should be returned to the Estate. The account freeze would otherwise expire on August 3, 2009. To view the Receiver's motion to extend the account freeze on these accounts, click here.

To view the Receiver's motion seeking expedited and summary consideration of the issues involved in the filings, click here.

Notice of the Status of United States v. Robert Allen Stanford et al. and United States v. James M. Davis -- At the request of the Department of Justice and as a courtesy to investors, we have added a link on our website to the Department of Justice’s Victim Witness website so that you can receive case updates and information about future court proceedings in United States v. Robert Allen Stanford et al. and  United States v. James M. Davis, including the dates of public court proceedings that either have or will occur in the near future. Please access the link or visit the Department of Justice's website at www.usdoj.gov/criminal/vns to obtain details about the upcoming August 6, 2009 change of plea hearing in United States v. James M. Davis, which will be held in Courtroom  8A before Judge David Hittner.

If you have any views about the upcoming plea and/or wish to appear and be heard at the plea hearing, you must submit your views to the prosecutors handling this investigation, by providing comments to Pam Washington at 1-888-549-3945 or via email at victimassistance.fraud@usdoj.gov, no later than Friday, July 31, 2009.

Receiver Report on Status of Frozen Accounts -- The latest report by the Receiver on the status of the account freeze and release process regarding Stanford Group Company and Stanford Trust Company accounts, dated as of July 8, 2009, reflects the following:

  • An estimated 20,597 customers of Stanford Group Company and Stanford Trust Company (Louisiana) have had their accounts at Pershing, J.P. Morgan or SEI released from the Court-ordered freeze;
  • 225 customers of Stanford Group Company and Stanford Trust Company have brokerage or other accounts that remain subject to the account freeze because the owners are former senior management of the Stanford companies, former financial advisors who appear to owe amounts to the Estate or customers who have not taken any action to repay an outstanding loan or debit balance owed to the Estate;
  • An additional 481 customers of Stanford Group Company have brokerage accounts at Pershing or JP Morgan that remain subject to the account freeze because they contain or appear to contain CD proceeds;
  • 232 of the 481 Stanford Group Company customers noted above have submitted applications for review and possible release and the resolution of those applications is in progress;
  • 95 customers of Stanford Trust Company have accounts at SEI that remain subject to the account freeze because they contain or appear to contain CD proceeds;
  • $17.9 million in CD proceeds is being held by the Receiver in escrow pursuant to stipulations with account holders; and
  • An estimated $251 million of the funds that remain frozen at Pershing, JP Morgan and SEI, plus an additional amount not yet determined, are proceeds related to CDs which the Receiver believes are funds that should be part of the Receivership Estate.

To see a copy of the full report, click here.

For further information about procedures available to transfer accounts that have been released from the freeze and procedures that apply to review of accounts that remain frozen, please see “Customer Account Review and Release Information” below.

U.K. Court Orders Regarding Estate Assets in the U.K. -- On July 3, 2009, a trial court in the United Kingdom issued a decision that recognized the Antiguan Liquidators as “foreign representatives” in the U.K. for Stanford International Bank Limited, and recognized the Antiguan liquidation proceeding for SIB as the “foreign main proceeding” for SIB, at least so far as UK law goes. In the same decision, the court also recognized, as a matter of U.K. law, the Receiver as the receiver for the other defendants in the U.S. receivership. If the decision is not reversed on appeal, and ignoring any asset freezes, the decision would give the Antiguan Liquidators powers over assets of SIB that are located in the United Kingdom.

However, all assets of SIB located in the United Kingdom have been frozen under two separate orders issued by U.K. courts. As a result, the cash of SIB in the United Kingdom is required to remain in place unless and until a UK court lifts or modifies the freeze, or the requesting party agrees to a lifting or modification of the freeze. One of these was issued at the request of the SEC, and the other at the request of the U.K. Serious Fraud Office (which in turn acted at the request of the U.S. Department of Justice). The order issued at the request of the UK Serious Fraud Office was issued in April 2009, but was not publicly disclosed until after the criminal indictments of Allen Stanford and others were returned in June 2009.

To the extent the U.K. decision recognizes the Antiguan Liquidators and the Antiguan liquidation proceeding as superior to the Receiver and the U.S. receivership, the Receiver believes it is wrongly decided and should be reversed. The Receiver will appeal the decision so it can be reviewed by a higher court.

Court Order Regarding Account Freeze -- On June 29, 2009, the Court issued an order that sets a deadline of August 3, 2009 for the Receiver to complete his review of frozen customer brokerage accounts at Stanford Group Company and frozen accounts at Stanford Trust Company. During that time, the Receiver is to assess whether to assert “claw back” claims against individual investors and to assert any such claims in a proceeding ancillary to the Receivership case, together with claims for prejudgment attachment. Any Stanford Group Company and Stanford Trust Company accounts as to which no such claim has been asserted by noon on August 3, 2009 will be unfrozen and released. With respect to Stanford Group Company and Stanford Trust Company accounts as to which any such claim is filed by the Receiver before that time, the Receiver will request the Court to continue the freeze until the claim is resolved.

The Order states that it does not affect accounts frozen because the owners are former senior management of Stanford companies, former financial advisors who appear to owe amounts to the Estate, or customers who have not taken any action to repay an outstanding loan or debit balance owed to the Estate.

Additional information about the impact of the Court’s order on the ongoing account review process for Stanford Group Company accounts will be posted on this website as it is developed by the Receiver.

To view a copy of the order, click here.

Filing of Additional Clawback Claims - The Receiver has filed additional "clawback" claims relating to more than $20 million of CD related proceeds. To view a statement regarding these claims, click here.

Federal Criminal Indictments Against Allen Stanford and Others - On June 19, 2009, a federal criminal indictment was unsealed that charges Allen Stanford and others of fraud, obstruction and other crimes related to the Stanford Financial companies. Also charged in the indictment were Laura Pendergest-Holt, the former chief investment officer of Stanford Financial, Gilberto Lopez, the former chief accounting officer, Mark Kurht, the former global controller, and Leroy King, the former administrator and CEO of Antigua's Financial Services Regulatory Commission. A separate federal criminal information was unsealed charging James Davis, the former chief financial officer of Stanford Financial, with fraud and conspiracy. A separate federal criminal indictment was unsealed that charges Bruce Perraud, a former Stanford Financial security specialist, with destruction of records related to a federal investigation. To view copies of the indictments and the information, click here.

SEC Files Second Amended Complaint in Civil Case - On June 19, 2009, the SEC filed a Second Amended Complaint in its civil lawsuit against the Defendants. The amended complaint adds allegations that Mark Kurht and Gilbert Lopez, former accounting officers of Stanford Financial, and Leroy King, the former administrator and CEO of Antigua's Financial Services Regulatory Commission, aided and abetted the alleged fraud. To view a copy of the amended complaint, click here.

Allen Stanford Motion to Disqualify Baker Botts – On June 16, 2009, Allen Stanford filed a Motion to Disqualify Baker Botts L.L.P. as lead counsel to the Receiver based on allegations of a conflict of interest arising out of the purported prior representation of Mr. Stanford by Baker Botts L.L.P. in organizing Guardian International Bank or Stanford International Bank. Mr. Stanford based his claim on the contents of a Baker Botts file that the firm produced to Mr. Stanford's lawyers in response to a request from James Stanford (Allen Stanford’s father), who is a former client of the firm. Allen Stanford also filed a related Emergency Motion to Stay Receivership Pending Defendants' Motion to Disqualify Baker Botts L.L.P., to which the Receiver will be responding shortly.

On June 30, 2009, the Receiver filed a response to the motion to disqualify. The response states that Baker Botts’ records do not show that Allen Stanford was ever a client of the firm, nor do they show that the firm formed, established or approved Stanford International Bank or its structure. What Baker Botts did do, between October 1985 and February 1986, was to perform $850 worth of legal services for James Stanford. The Baker Botts associate who did the work left the firm in 1987. The prior work bore no relationship to the work the firm is now engaged in on behalf of the Receiver, and no conflict of interest exists.

The Receiver's response was filed under seal at the request of Allen Stanford’s lawyers and because James Stanford may assert that the contents of the file are subject to the attorney client privilege. The Receiver also delivered a copy of the law firm's file, together with copies of the time records that the firm has of the matter, to the Court for in camera inspection.

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.

Sale of Building by Swiss Entity - Questions have been raised in the press recently, apparently quoting allegations by Allen Stanford, regarding the sale by Stanford Group Suisse AG ("Stanford AG") of its office building in Zurich. The following describes the sale process and corrects inaccuracies in some press reports. Stanford AG was engaged in the investment management business on behalf of customers. After the institution of the Receivership, Stanford AG faced a severe liquidity crisis, as its customers withdrew the assets the entity had been managing. The withdrawals deprived the entity of its only significant source of revenue. As a result, Stanford AG was behind in payments to creditors and employees, creating a substantial risk it would be placed imminently into a forced liquidation under Swiss law.

To address the liquidity issue, the board and management of Stanford AG made an urgent request to the Receiver for a substantial cash infusion, but the Receiver concluded that that was not a good use of Estate funds. The board and management then decided to seek a buyer for the Zurich office building, Stanford AG’s only significant asset. After receiving several offers, they chose the highest offer, for 24 million Swiss francs (approximately $22 million). In addition to being the highest offer, that offer was also from a bidder who could act quickly and who was willing to invest 5 million Swiss francs in Stanford AG upon signing the purchase agreement, which would allow Stanford AG to avoid a forced liquidation. Avoiding a forced liquidation was desirable because a sale of the building in liquidation, where the principal focus would simply be to satisfy creditors, likely would have generated a lower sales price. The sales price received by Stanford AG exceeded the appraised value under both a recent appraisal and a year-old appraisal.

The sale transaction was initiated, authorized and implemented by the directors and management of Stanford AG. Representatives of the Receiver were consulted regarding the transaction, and they reviewed and commented on the related documents and on the sale process. Approval of the sale by the Dallas Federal Court was not necessary, because Stanford AG, not the Receiver, controlled the transaction. In light of Swiss legal requirements and other reasons, the Receiver concluded it was not possible in the short time available for the Receiver to take control of the board of directors of Stanford AG. in a timely enough fashion in order to avoid liquidation. Further, the Receiver concluded that the actions taken by the board and management were reasonable and proper and that such actions maximized the return to the estate.

After the agreement was signed, Stanford AG entered a voluntary, and orderly, liquidation to wind up its affairs. The Estate is entitled to receive the net proceeds remaining after liquidation of assets and satisfaction of claims of creditors as required by Swiss law.

Status of Stanford International Bank, Ltd. CDs - The Receiver has continued to receive many inquiries from investors who purchased certificates of deposit ("CDs") issued by Stanford International Bank, Ltd. ("SIB"). Unfortunately, as the Receiver has said since early in the case, the news for CD investors is not good. Both the Receiver and the liquidators appointed by the Antiguan court have concluded that SIB does not have the assets required to redeem any significant portion of the CDs it sold, nor to pay interest on those CDs. Investors in CDs will likely recover only a fraction of the amounts invested in those CDs, and the Receiver cannot predict what that recovery might be nor when investors might receive that recovery.

A number of CD investors have contacted the Receiver to ask when their CDs will be "released." Many of these investors appear to believe that the reason they cannot access their money is that the Receiver has frozen their CD accounts. Those requests have often been accompanied by accounts of the hardships that investors are suffering because they cannot access the funds they paid to purchase CDs. The Receiver recognizes that investors are suffering through hardships because of their investment in SIB CDs.

However, in the case of CDs, there is no account to “release.” Put simply, the problem is that the assets available to SIB are not sufficient to pay any significant portion of the amount owed on the outstanding CDs.

Unlike funds put into brokerage accounts, the funds that were transferred by investors to SIB to purchase CDs were not held, and are not held, in segregated accounts for the individual investors. Instead, the CDs were simply debt obligations on the part of SIB (to pay interest and, upon redemption, principal) to the CD holders. SIB cannot meet those obligations. It appears that funds paid to purchase CDs were used by SIB and other Stanford entities to buy other assets and/or for other purposes. The SEC has alleged that CDs were sold in a Ponzi scheme through which the proceeds of newer CD sales were used to make payments on older CDs or diverted to other uses unrelated to the CDs.

The Receiver is working to identify and secure assets that can be applied to the claims of CD holders and other creditors. That process will likely take a considerable period of time, and is unlikely to result in anything approaching a complete recovery for CD holders.

For more information about SIB CDs, click here.

Response to Bukrinsky Motion Regarding Bankruptcy – On June 1, 2009, the Receiver filed a response in opposition to a motion by Samuel Bukrinsky and other CD holders requesting the Court to permit them to file an involuntary bankruptcy petition against SIB or any of the other Defendants. The Receiver believes that a bankruptcy proceeding at this time would be counterproductive and not in the best interests of Stanford investors and creditors.

The following are among the reasons a bankruptcy at this time would be an inferior vehicle for addressing the many complex issues involved in untangling the massive fraud that lies at the heart of this case:

  • Receivership generally is more efficient and cost-effective than bankruptcy because, among other things, receiverships are not subject to the bankruptcy practice of the creation of multiple creditor committees, each with its own counsel and other professionals charging fees to the estate.
  • The particular circumstances of this Receivership would add even more costs to a bankruptcy filed at this time. Bankruptcy now would result in substantial transition costs associated with the turnover of assets and information from the Receiver to a potential superseding trustee.
  • The Receivership’s cost and efficiency advantages over bankruptcy do not sacrifice the due process rights of investors and other creditors. For example, they will be given notice of, with an opportunity to object to, the distribution plan that the Receiver will ultimately propose.
  • Receivership provides needed flexibility in formulating a plan of distribution that is fair and equitable for all stakeholders. Unlike bankruptcy, receivers can take into account relative fault within a class of creditors, and fashion an equitable plan of distribution that does not treat all creditors within a class identically if they are not deserving of equal treatment.
  • Additionally, the Bankruptcy Code’s rigidity can have negative consequences for investors, including CD holders. Because their claims are related to the sale or purchase of a security, the Bankruptcy Code mandates that their claims be subordinated to those of other creditors. This likely would result in a much lower recovery for SIB CD investors in bankruptcy than they can achieve in a distribution by the Receiver outside of bankruptcy.

To view a copy of the response filed by the Receiver, click here.

Court Agrees to Consider Chapter 15 Request - On May 15, 2009, the Court agreed to consider whether the U.S. courts should recognize, under Chapter 15 of the U.S. Bankruptcy Code, the proceedings for the liquidation of Stanford International Bank, Ltd. (“SIB”) that are pending in the Antiguan courts. The Court’s May 15 ruling was requested by Messrs. Nigel Hamilton-Smith and Peter Wastell, who were recently appointed by the Antiguan court to serve as liquidators in that proceeding (the “Antiguan Liquidators”).

The May 15 ruling neither accepted nor rejected the Antiguan Liquidators’ request for recognition under Chapter 15; it provided only that the request would be considered and that the District Court would consider it instead of a U.S. bankruptcy court. The Amended Receivership Order dated March 12, 2009 had precluded anyone other than the Receiver from making a filing under any provision of the U.S. Bankruptcy Code covering SIB or any other Defendant without approval of the Court.

Chapter 15 is a provision in the U.S. Bankruptcy Code, added in 2005, that applies to bankruptcy or other insolvency proceedings in multiple countries. It provides for U.S. court recognition of foreign insolvency proceedings under certain circumstances, in order to promote cooperation among countries, so long as neither the recognition nor the proceeding is manifestly contrary to U.S. public policy.

The May 15 ruling directed the Antiguan Liquidators, the Receiver and the other parties to the Receivership case to confer regarding what process the Court should follow in considering the Antiguan Liquidators’ request for recognition of the Antiguan proceeding under Chapter 15. All are to advise the Court of their positions regarding that process by May 29, 2009. The Court will then decide when and how to consider the request for recognition.

When the Court addresses the Antiguan Liquidators’ request for recognition under Chapter 15, it will determine first whether to recognize the Antiguan Liquidators as “foreign representatives.” If it does so, it will then determine whether the Antiguan proceeding is a “foreign main proceeding” or a “foreign non-main proceeding.” The Court’s decisions on these issues will then determine — for purposes of U.S. law — which of the two proceedings, the U.S. Receivership proceeding or the Antiguan liquidation proceeding, will be considered the primary proceeding regarding SIB and how the two proceedings will relate to one another.

The Antiguan legal system has no method for recognition of insolvency proceedings in other countries (i.e., no counterpart to the U.S. Chapter 15), and to date the Antiguan courts have refused to recognize the validity of the U.S. Receivership Order.

A detailed statement of the Receiver’s position on the Antiguan Liquidators’ request for recognition will be set forth in papers to be filed with the Court at the appropriate time.

To view the Court’s May 15, 2009 order, click here.

Account Management Fees - For information on the status of account management fees regarding certain customer accounts at Stanford Group Company (Pershing LLC), Stanford Capital Management (Pershing LLC) and Stanford Trust Company, click here.

Customer Account Review and Release Information – Important information about the status of released customer accounts and a June 29, 2009 Court order regarding the account freeze is set forth above under "Court Order Regarding Account Freeze" and "Receiver Report on Status of Frozen Accounts". The paragraphs below describe procedures available to transfer accounts that have been released from the freeze and procedures that apply to review of accounts that remain frozen.

  • Transfer of Released Stanford Group Company Accounts. Under the Court’s March 5 and March 12, 2009 orders, as requested by the Receiver, 28,452 Stanford Group Company customer brokerage accounts (which had aggregate assets of approximately $4.6 billion) became eligible for transfer to a new firm. The transfer process now has been initiated by the customer and completed with respect to the large majority of these accounts, but a significant number have not yet been transferred due to inaction by the customer.

    Holders of the remaining such released accounts may transfer their accounts at any time, and they are encouraged to do so promptly. For information regarding the applicable transfer procedures, click here. Any of these accounts that are not transferred to a new firm by the customer may be transferred in the near future by the Receiver in bulk to a new firm selected by the Receiver in order to reduce Estate expenses.

  • Account Review Process for Stanford Group Company Accounts That Remain Frozen. On April 6, 2009, the Receiver established a process, which had been approved by an order of the Court, addressing the 3,988 Stanford Group Company customer brokerage accounts that remained frozen. These accounts, which had aggregate assets of approximately $1.7 billion, were made eligible for an account review process that permits holders of the accounts to provide information that may lead to the release of their accounts. Most of these accounts remained frozen because data available to the Receiver indicated that the accounts may be associated with proceeds of the allegedly fraudulent products or activities; others remained frozen because they are owned by certain Stanford related persons; and others remained frozen because the accounts were associated with outstanding non-purpose loans or other customer debit balances.

    The Receiver, in consultation with the Examiner, has implemented three procedures to expedite the review and release of customer accounts that have been determined to hold proceeds related to SIB CDs:

    • First, under a Court order issued May 22, 2009 at the request of the Receiver and the Examiner, the Receiver is able to release a portion of the assets in a customer's account without Court approval, if the Receiver and the customer agree. This is being done in situations where a portion of the account assets would continue to be held in an amount that would be sufficient to satisfy certain claims that may be brought by the Receiver to recover proceeds relating to SIB CDs. The Receiver has contacted or is in the process of contacting the relevant customers.

    • Second, as further provided in the Court's May 22 order, the Receiver is also releasing additional accounts where the Receiver determines in his sole discretion that the account holder has received only de minimis proceeds from SIB CDs.

    • Third, with respect to many of the accounts that continue to be held because the customer received proceeds related to SIB CDs, a single customer owns multiple such accounts. If the amount sufficient to satisfy the potential claims against the customer's account is contained in fewer than all of a customer's accounts, the Receiver will release the other accounts to the customer. In some cases this will require consultation with the customer to assure that the account that remains frozen contains sufficient cash, rather than securities whose value may vary, to cover the potential claims. This may require the liquidation of securities, which will be at the discretion of the customer. If desired, the customer may also provide other funds to avoid liquidation of holdings. The Receiver is in the process of contacting the relevant customers. Releases of this type do not require Court approval.

    To date, the Receiver has given priority in the review process to accounts that are owned by persons who are not Stanford related and whose owners certified in their review applications that they had not received proceeds of redemption of Stanford International Bank Ltd. certificates of deposit, as well as to those with demonstrated medical or financial emergencies. Upon completion of the review of an account, the Receiver notifies the account owner of the result of the review. Released accounts either have been transferred or are eligible to be transferred by the owner to a new firm as described under “Transfer of Released Stanford Group Company Accounts” above.

    For information about how to request that a frozen Stanford Group Company brokerage account be released, click here.

  • Stanford Group Company Accounts with Outstanding Loans or Debit Balances. A number of Stanford Group Company customer accounts remain frozen solely because the accounts have outstanding non-purpose loans or other customer debit balances. The owners of these accounts may obtain release and transfer of the net assets in their accounts at any time by paying off the debit balances. For information about how to pay off such an account balance and obtain release of the accounts, click here (FAQ 15).

  • Stanford Trust Company Accounts -- On May 27, 2009, the Court issued an order granting the Receiver’s request to, among other things, release Stanford Trust Company accounts where the Receiver determines in his sole discretion that the accountholder has received only a de minimis amount of proceeds from SIB CDs. On June 5, 2009, pursuant to the May 27 order, the Receiver released 1,142 Stanford Trust Company accounts. These 1,142 accounts are in addition to the 174 Stanford Trust Company accounts previously released under the Court’s order issued on April 23, 2009. Any of these released accounts that have not yet been transferred by the customer to a new financial institution may be transferred by the customer to a new institution at any time.

    The remaining Stanford Trust Company accounts that continue to be frozen hold approximately $35 milliion in proceeds related to SIB CDs. Under the May 27 order, the Receiver may now release a portion of the assets in these 122 customer accounts without Court approval, if the Receiver and the customer agree on certain actions. This will be done in situations where a portion of the account assets (or assets in a related account) would continue to be held in an amount that would be sufficient to satisfy certain claims that may be brought by the Receiver to recover proceeds relating to SIB CDs. The Receiver has contacted or is in the process of contacting the relevant Stanford Trust Company customers.

    For information on how to transfer a Stanford Trust Company account that has been released, click here to view the FAQs regarding Procedures for Transfer of Certain Stanford Trust Company Accounts. (Click here to view the April 23 order and here to view the May 27 order.)

Report of the Receiver - On April 23, 2009, the Receiver filed a report with the Court that discusses numerous topics regarding the Estate and related proceedings, including activities, findings, accomplishments and conclusions to date. (Click here to view a copy of the report.)

Redirection of Client Online Account Access - As of April 24, 2009, all former Stanford Financial Group websites that were in operation prior to the commencement of the Receivership were shut down and redirected to this website. Clients with online account access can still access their accounts online by clicking here.

Court Issues Order Denying Interventions - On April 20, 2009, the Court issued an order denying motions filed by certain account holders and others to intervene in the case. In so doing, the Court found that the freeze of customer accounts at the outset of the Receivership "properly applied to the movants' accounts." The Court also found that the SEC and the Receiver adequately represent the interests of the movants in the pending lawsuit and that, in any event, the Court has appointed "an examiner to present the collective interests of Stanford investors to the Court." The Court further referenced the account review process established by the Receiver and held that movants could not show that they have an inability to protect their interests. (Click here to view the order.)

Court Issues Order Appointing Examiner - Also on April 20, 2009, the Court issued an order appointing John J. Little, of the Dallas, Texas law firm of Little Pedersen Fankhauser LLP, as Examiner in the case. The order directs the Examiner to convey to the Court such information as the Examiner, in his sole discretion, shall determine would be helpful to the Court in considering the interests of the investors in any financial products, accounts, vehicles or ventures sponsored, promoted or sold by any of the Defendants. The order also sets forth the Examiner's authority. The Receiver looks forward to working with the Examiner to maximize the recovery of assets for the benefit of Stanford claimants, world-wide. (Click here to view the order.)

General Information

On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing a Receiver for all the assets and records (the “Receivership Estate”) of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, R. Allen Stanford, James M. Davis and Laura Pendergest-Holt ("Defendants") and of all entities they own or control. The February 16 order, as amended March 12, 2009 (as so amended, the "Amended Receivership Order"), directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. In addition, the Amended Receivership Order restrains and enjoins, without prior approval of the Court, creditors and all other persons from the following:

  • any act to obtain possession of the Receivership Estate assets;
  • any act to create, perfect, or enforce any lien against the property of the Receiver, or the Receivership Estate;
  • any act to collect, assess, or recover a claim against the Receiver or that would attach to or encumber the Receivership Estate;
  • the set off of any debt owed by the Receivership Estate or secured by the Receivership Estate assets based on any claim against the Receiver or the Receivership Estate; and
  • the filing of any case, complaint, petition, or motion under the Bankruptcy Code (including, without limitation, the filing of an involuntary bankruptcy petition under chapter 7 or chapter 11 of the Bankruptcy Code, or a petition for recognition of foreign proceeding under chapter 15 of the Bankruptcy Code).

(Click here to view the Amended Receivership Order.)

On February 16, 2009, the Court also signed a Temporary Restraining Order (“TRO”) that temporarily enjoined the Defendants from committing certain violations of law. The order containing the TRO also contains an Order Freezing Assets and Order Requiring Preservation of Documents ("Freeze Order"). The Freeze Order contains certain provisions that continue in full force and effect until further order by the Court, including, among other things:

  • provisions that freeze the assets of the Receivership Estate and prohibit the destruction of records,
  • a provision that enjoins any financial or depository entities that hold one or more accounts in the name, on behalf or for the benefit of the Defendants or subsequently added relief defendants from engaging in any transaction in securities or any disbursement of funds or securities pending further instructions of the Receiver, and
  • a provision that enjoins all other entities and individuals from disbursing any funds, securities or other property obtained from the Defendants or subsequently added relief defendants without adequate consideration.

On March 2 and March 12, 2009, the Court entered preliminary injunctions against the Defendants to substantially the same effect as the TRO and the Freeze Order. (Click here to view the preliminary injunctions.)

The Amended Receivership Order, the TRO, the Freeze Order and the preliminary injunctions were issued in connection with a lawsuit brought by the Securities and Exchange Commission against the Defendants. (Click here to view the amended complaint filed by the Securities and Exchange Commission on February 27, 2009.)

(Click here to view the website of the Securities and Exchange Commission.)

Additional information will be posted on this website as available.

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