WASHINGTON — The Security and Exchange Commission (SEC) has decided to compensate Stanford Group Company (SGC) victims, stating that people who invested money through SGC are entitled to protection by the Securities Investor Protection Corporation (SIPC).
The SEC said it would formally ask SIPC to institute a claims process, according to Sen. Roger Wicker (R-Miss.)
“Many in Mississippi lost their life savings because of Allen Stanford’s fraud,” said Wicker. “For almost two years they have been waiting for an answer on their request for coverage. I am pleased the SEC has made a decision to help victims seeking compensation. This is an important step for those who found themselves victims of fraud.”
Last year, Wicker authored a letter in which he was joined by members of both the House and Senate to the chairwoman of the SEC. Wicker encouraged her to take immediate action to compensate the thousands of U.S. citizens from 46 states, including Mississippi, who lost money in the Stanford Group Company ponzi scheme.
The letter recommended that the SEC “heavily consider immediately initiating a liquidation of SGC under the Securities Investor Protection Act and order SIPC to pay claims” of victims who were defrauded of $7.2 billion by SGC.
SIPC was created by Congress in 1970 to recoup losses, within certain limits, from bankrupt or financially-troubled brokerages. Until the recent SEC decision, the SGC victims had not been found to be qualified for SIPC relief.
Source: Sen. Roger Wicker