The complaint is filed against Defendants Stanford Group Company, Stanford Financial Group, Stanford International Bank, LTD., Stanford Holdings, Inc., Stanford Capital Management, LLC (collectively referred to as “Stanford”) and certain individual Defendants.
Specifically, the complaint alleges that Stanford, and the individual Defendants, engaged or participated in the implementation of manipulative devices to falsely report investment returns to customers, made or participated in the making of false and misleading statements, and participated in a scheme to defraud, or a course of business that operated as a massive fraud or a deceit on its customers. Plaintiffs’ claims include fraud based on misrepresentation in connection with the sale of securities in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. As a result of Defendants’ wrongful conduct and scheme, thousands of investors placed millions of dollars into Stanford’s managed portfolios, including the purchase of “depositor-secured” Certificates of Deposit, and have sustained significant financial losses.
This fraud was accomplished though the direction and active participation of the individual Defendants who knowingly violated Securities and Exchange Commission (“SEC”) and FINRA regulatory provisions, and federal securities law. When certain employees of Stanford complained about discrepancies in certain investment results, Stanford, through its officers and directors (including the individual Defendants), knowingly attempted to “cover up” this information, opting instead to hide and obstruct the truth, and Stanford’s duty of compliance with regulatory and statutory law, and its fiduciary duty of full and fair disclosure to its customers.
On or about February 17, 2009, the SEC filed its complaint in the United States District Court, Northern District, in Dallas, Texas, No. 3-09CV0298, alleging, inter alia, a myriad of false and misleading practices by Stanford and its individual officers and control persons, in violation of federal securities law. In response to the SEC’s Application for Emergency Relief, the Honorable Reed O’Connor issued a Temporary Restraining Order enjoining further violation of federal securities law, freezing the assets of the certain Defendants, ordering the return of assets outside the United States to the jurisdiction of the federal court, and appointing a Receiver to marshal the assets of certain Defendants.
Similar class action complaints have been filed in the U.S. District Courts for the Northern District of Texas and the Middle District of Louisiana.
On September 28, 2009, an order was granted on the Plaintiffs' motion to dismiss the case with prejudice.