Leslie Turk

Judge: Stanford receiver can only claw back interest

by Leslie Turk

On Friday a federal judge in Dallas ruled that Stanford investors who moved money out of the CD accounts before the SEC shut the company down in February should be able to keep their principal.

And while the court-appointed receiver, attorney Ralph Janvey, has vowed to appeal the ruling, which means he can only claw back interest earned on the so-called CDs, Friday’s decision was the first real sign of hope for a number of Lafayette area investors. (View a comprehensive list of investors who withdrew money from the CDs here.)

The SEC has been fighting to strip Janvey of any clawback powers, but U.S. District Judge David Godbey denied the regulatory agency’s request. Godbey, however, put his ruling on hold for 10 days, saying he wants to give Janvey time to seek a second opinion on the issue of whether clawbacks should also apply to principal, Bloomberg reported.

The ruling does not affect local Stanford investors with money sitting in the CD accounts when the SEC moved in. They are still expected to recover only pennies on the dollar.