US Argues Investors Can't Sue SEC Over Stanford Fraud

Law360, New York (April 8, 2011, 9:31 PM EDT) -- Prosecutors asked a Texas federal judge Thursday to dismiss investors' allegations that they lost more than $18 million because a conflict of interest within the U.S. Securities and Exchange Commission kept it from halting Robert Allen Stanford's Ponzi scheme.

The so-called "discretionary function" exception prevents lawsuits based on federal officials' policy considerations and discretionary choices, according to a motion filed in the U.S. District Court for the Northern District of Texas by U.S. Department of Justice attorneys.

While the plaintiffs allege that the SEC should have...
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