SEC Negligence Not Protected Under FTCA, Ponzi Victims Say

Law360, Los Angeles (December 3, 2013, 7:43 PM EST) -- Plaintiffs in a putative class action accusing the U.S. Securities and Exchange Commission of facilitating Robert Allen Stanford’s $7 billion Ponzi scheme asked the Fifth Circuit on Monday to revive the case, arguing a law barring suits over federal officials' discretionary choices did not apply.

The plaintiffs asked the Fifth Circuit to overturn a lower court’s dismissal, which ruled that the discretionary function exception of the Federal Tort Claims Act shielded the SEC from the victims' suit. The alleged decision of former SEC official Spencer Barasch...
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