Investors Say SEC Not Exempt From Stanford Gaffes

Law360, New York (May 11, 2011, 3:36 PM EDT) -- Investors suing the U.S. Securities and Exchange Commission over its failure to stop Robert Allen Stanford's alleged Ponzi scheme told a Texas federal court Tuesday that the agency is not shielded by a law barring suits over federal officials' discretionary choices.

The so-called discretionary function exception of the Federal Tort Claims Act does not excuse the SEC from liability in the case because agency officials were negligent, abused their offices and violated ethics regulations in the course of allowing the scheme to continue — offenses of...
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