Stock broker arbitration is, for most, a useful and appropriate tool for pursuing a case against a stock broker or financial adviser when wrongdoing inherent with investments incurring losses, is alleged. Such a legal response avoids time-consuming and costly trials, and can restore an investor's losses if wrongdoing is proven.
A stock broker arbitration lawsuit is considered a preferred response when allegations of fraud or negligence are made.
In the Robert Allen Stanford case, however, the losses totaled $7 billion dollars from upwards of 20,000 investors who fell victim to an alleged Ponzi scheme. In spite of denials that he defrauded anyone, The Advocate (9/13/12) reports the 62-year-old Stanford was sentenced to 110 years in federal prison for his role in a stock fraud case that used, according to the report, a bogus offshore bank that served as a conduit for the funneling of funds directly to Stanford and his related companies.
The SEC now turns its attention to four individuals who worked with, and for Stanford while the alleged Ponzi scheme was in operation.
One of the four is identified in the report as Jason T. Green, who served as president of Stanford Group Co. (SGC) from February 1996 until the corresponding month in 2009, at which point the SEC moved in to shut down SGC.
It is important to note, according to the report, that the SEC does not accuse Green or the other three men in its purview of stock fraud or knowingly participating in a Ponzi scheme.
However, the SEC continues to allege, pending further investigation, that the four men knew that bank depositors were falsely told their money was properly or safely insured when it was not, or ignored evidence of such.
Couched in its stock broker investment fraud allegations against Green, are accusations by the SEC that Green falsely told Louisiana investors Stanford certificates of deposit were "as safe as US treasuries" or, "insured by Lloyds of London" or, "safer than US banks," because of the existence of insurance deemed "stronger than FDIC coverage."
In defense of the accusations, Green's stock broker fraud lawyer said in comments to Thompson Reuters on August 31st that Green was unaware of the fraud, or that he had any knowledge that SGC was, in reality, just a Ponzi scheme.
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Stock fraud arbitration is a common response to allegations of wrongdoing.