This is a class action against an insurance broker, the Defendant, who played an instrumental role in enabling Allen Stanford and his companies to perpetrate a massive multibillion dollar fraud against scores of investors, largely Venezuelans and other South Americans.
Through Stanford's Miami office, these investors purchased the now notorious Certificates of Deposit offered by Stanford International Bank ("SIB") relying on phony assurances that the CDs were insured, and SIB could be trusted as a sound bank. The Defendant supplied the proof for Stanford.
From 2005 through 2008, undated "safety and soundness" letters went out to Stanford's agents under the Defendant letterhead, and signed by a Willis executive, identifying the insurance policies issued from Lloyd's of London supposedly underlying SIB's operations. The letter proclaimed SIB's employees to be "first class business people," and claimed that SIB had undergone a "stringent Risk Management Review by an outside audit firm."
None of it was true. The investments had no meaningful insurance relative to the investors' CDs. The supposed independent auditor Defendants touted by Willis was a small Antiguan firm Stanford controlled. And, far from SIB being a legitimate company that could pass a real audit, SIB was a fraud that funneled deposits to Allen Stanford personally as supposed undocumented "loans," speculated in real estate, and made other risky investments.
The Defendant provided these letters to Stanford, and sometimes directly to investors, knowing the statements were false, or with severe recklessness as to the letters' veracity. The Defendant had every expectation investors would be relying on the letters in deciding to invest in what they believed were safe, insured high-yield CDs. Plaintiff Ram-ii was one such investor, and now he, and a class of similarly situated investors, have a right to recover from the Defendant.
On October 7, 2009, a transfer order was granted by the court stating that the Northern District of Texas is an appropriate transferee district for this litigation, because (1) three of the eight actions are already pending there before Judge David C. Godbey, who is also presiding over the SEC action, and (2) Stanford is headquartered in nearby Houston, Texas, and parties, witnesses and documents are likely there. It is therefore ordered that, pursuant to 28 U.S.C. § 1407, the actions pending outside the Northern District of Texas are transferred to the Northern District of Texas and, with the consent of that court, assigned to the Honorable David C. Godbey for coordinated or consolidated pretrial proceedings with the actions pending (MDL-2099).