The Securities and Exchange Commission should not face a class action
for its failure to investigate R. Allen Stanford's $7 billion Ponzi
scheme, a federal judge ruled.
Several investors in Stanford International Bank Ltd. sued the agency in 2012, seeking relief under the Federal Tort Claims Act. They said the SEC knew of the bank and Stanford Group Co.'s scheming, and that former Fort Worth regional enforcement director Spencer Barasch "was negligent and engaged in deliberate misconduct" by failing to investigate before the investors suffered massive losses.
"Had Barasch not done as he did, none of the plaintiffs would or even could have invested with SIBL - its' doors would have been shut - and the damages suffered by the plaintiffs would have been completely avoided," according to their complaint.
The federal government later moved to dismiss the suit for lack of subject matter jurisdiction, arguing the SEC enjoys complete discretion in deciding what matters to investigate under the discretionary function exception to the FTCA.
http://www.courthousenews.com/2013/06/26/58858.htm
Several investors in Stanford International Bank Ltd. sued the agency in 2012, seeking relief under the Federal Tort Claims Act. They said the SEC knew of the bank and Stanford Group Co.'s scheming, and that former Fort Worth regional enforcement director Spencer Barasch "was negligent and engaged in deliberate misconduct" by failing to investigate before the investors suffered massive losses.
"Had Barasch not done as he did, none of the plaintiffs would or even could have invested with SIBL - its' doors would have been shut - and the damages suffered by the plaintiffs would have been completely avoided," according to their complaint.
The federal government later moved to dismiss the suit for lack of subject matter jurisdiction, arguing the SEC enjoys complete discretion in deciding what matters to investigate under the discretionary function exception to the FTCA.
http://www.courthousenews.com/2013/06/26/58858.htm
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