Stanford Group Investors Sue SEC, Receiver

Stanford Group Investors Sue SEC, Receiver - 3/5/2009

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

Stanford Group Investors Sue SEC, Receiver
Kevin LaCroix

The D & O Diary. March 5, 2009
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EXCERPT: On March 4, 2008, twenty-one Stanford Financial Group investors filed an action in the Southern District of Texas against the SEC, the U.S. Marshal’s Service and the Stanford Group receiver claiming that the defendants violated the investors’ rights under the U.S. Constitution by freezing their Stanford Group accounts though the investors have been accused of no wrongdoing. The investors’ complaint opens with a quotation from Thomas Jefferson ("The true foundation of republican government is the equal right of every citizen in his person and property and in their management") and alleges that "acting in secret on President’s Day," the defendants "seized private property and suppressed free speech and assembly." The complaint alleges that the defendants "have not come forward with any evidence that the owners of the seized accounts did anything wrong, yet the Defendants continue to exercise control over Plaintiffs’ property in a reckless and negligent manner." […] the complaint alleges, the defendants took control of 35,000 bank accounts, including those of the plaintiffs. As a result of these actions, the plaintiffs cannot access their accounts. The group of twenty-one plaintiffs includes a gallery of victims whose woes surely tug the heartstrings. Plaintiff Tory DeArmond "lost her husband to cancer five days after the Presidents’ Day order froze the couple’s account." Plaintiff Alva Kerr suffers "the constraints of multiple sclerosis." Plaintiff Catherine Coulter "runs the Greyhound Pets of America Houston organization that places retired greyhounds for adoption." […] The complaint seeks relief for "Violations of the First Amendment" (an apparent reference to the prohibitions barring the financial advisors from contacting their clients); "Violations of the Fourth Amendment" (for unreasonable seizures); Conversion; Negligence; and Gross Negligence. The complaint seeks actual damages; prejudgment interest; attorney’s fees; punitive damages; and post-trial damages. Oddly, the complaint does not specifically seek to have the freeze order lifted.

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