Securities & Exchange Commission v. Securities Investor Protection Corp.
- Summarized by Bruce Weiner , Rosenberg, Musso & Weiner
- 10 years 5 months ago
- Citation:
- 12-5286
- Tag(s):
-
- Ruling:
- The district court correctly held that the Securities Investor Protection Corp. (SIPC) could not be compelled to proceed to liquidate the Stanford Group Company (SGC) on behalf of persons who purchased CDs from Stanford International Bank, Ltd. (SIPL), because those persons were not customers of SGC. The customers were lenders to SIPL because they purchased the CDs directly from SIPL and not customers of SGC within the meaning of the Securities Investor Protection Act because they did not send funds to SGC.
- Procedural context:
- Appeal from the United States District Court for the District of Columbia
- Facts:
- The Securities and Exchange Commission (SEC) sought a court order compelling SIPC to liquidate SGC, a member broker on behalf of customers of SIPL. SGC was part of a multibillion dollar fraud perpetrated by Robert Allen Stanford. Both SGC and SIPL were Stanford entities. Customers, often acting on the advice of persons at SGC, bought CDs from SIPL. The customers sent their money directly to SIPL and not to SGC. The District Court denied the SEC's request and it appealed to the Circuit Court.
- Judge(s):
- Garland, Srinivisan, Sentelle
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
