Stanford's Ponzi victims in $35 million settlement with NY law firm
Reuters
Published May 09, 2016 01:32PM ET
Stanford's Ponzi victims in $35 million settlement with NY law firm
By Jonathan Stempel
(Reuters) - A large New York law firm that once represented the now-imprisoned Texas financier Allen Stanford has reached a $35 million settlement with victims of his estimated $7.2 billion Ponzi scheme.
Chadbourne & Parke entered the accord on Feb. 25, two weeks before a federal appeals court said the firm and Proskauer Rose, which also represented Stanford, were immune under Texas law from liability for the victims' losses.
The settlement was discussed in a filing last week with the federal court in Dallas.
Roughly 18,000 of Stanford's former investors had sued Chadbourne and Proskauer over work done for the swindler by Thomas Sjoblom, a lawyer who worked at both firms.
Investors said the firms turned a blind eye to Stanford's sale of fraudulent high-yield certificates of deposit through his Antigua-based Stanford International Bank, and obstructed a related U.S. Securities and Exchange Commission probe.
Stanford, 66, is serving a 110-year prison term after being convicted of fraud in March 2012. His scheme surfaced in 2009.
The Chadbourne settlement resolves claims by Ralph Janvey, a court-appointed receiver for Stanford's companies, and by a committee of Stanford investors helping him recover money for creditors.
Chadbourne did not admit wrongdoing in agreeing to the settlement, which requires approval by U.S. District Judge David Godbey in Dallas.
Godbey on Friday dismissed separate claims by the investors against Mauricio Alvarado, a former Stanford general counsel.
A Chadbourne spokesman had no immediate comment on Monday. Proskauer did not immediately respond to requests for comment. Janvey and a lawyer for the investors did not immediately respond to similar requests.
The cases are Troice et al v. Proskauer Rose LLP et al, U.S. District Court, Northern District of Texas, No. 09-01600; and Janvey et al v. Proskauer Rose LLP in the same court, No. 13-00477.
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Written By: Reuters
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