High Court Says Law Firms Can't Avoid Stanford Ponzi Suits

By Max Stendahl (February 26, 2014, 11:06 AM EST) -- Investors victimized by Robert Allen Stanford's $7 billion Ponzi scheme may sue Proskauer Rose LLP, Chadbourne & Parke LLP and others for allegedly aiding the fraud, the U.S. Supreme Court ruled Wednesday, finding that state law claims weren't precluded by federal law.

The high court in a 7-2 decision affirmed a Fifth Circuit ruling allowing four state-law class actions over the Ponzi scheme to move forward. The suits alleged Proskauer, Chadbourne, two insurance brokers and a financial services firm aided the Ponzi scheme, in which Stanford's foreign bank sold investors sham securities called certificates of deposit. Stanford was sentenced to 110...

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