SEC Can't Make SIPC Repay Stanford Victims, Judge Says

Law360, New York (July 3, 2012, 5:40 PM EDT) -- The U.S. Securities and Exchange Commission cannot force the Securities Investor Protection Corp. to compensate victims of convicted tycoon Robert Allen Stanford's $7 billion Ponzi scheme, a Washington federal judge said Tuesday in a first-of-its-kind decision.

U.S. District Judge Robert L. Wilkins threw out the SEC’s Dec. 12 application to compel SIPC to pay the fraud victims’ claims through a liquidation proceeding. The corporation, funded by the brokerage industry to cover investors who lose money in failing firms, successfully argued that the Securities Investment Protection Act...
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