Leslie Turk

Stanford advisers want their CD commissions

by Leslie Turk

Ten former Stanford financial advisers are asking a federal judge to release their personal funds that have been frozen since regulators shut Stanford down in February. The advisers are from Tennessee, Florida, Georgia, Pennsylvania and North Carolina, The Advocate reported today. Six are among 66 advisers the court appointed receiver, Ralph Janvey, sued in April to recover $4.4 million he calls “ill-gotten proceeds from a fraudulent scheme.”

The only Lafayette adviser named in the April suit is Tiffany Angelle, who earned almost $700,000 in CD commissions from January 2007 to January 2009. Angelle was vice president of the River Ranch office. The receiver is also seeking $1.4 million in commissions from Hank Mills of Baton Rouge, who worked closely with Angelle in the Lafayette market.

The 10 advisers say they, like investors, should be considered innocent victims in the alleged Ponzi scheme. They say they too were duped.

Not so, says Jean Anne Mayhall of Folsom, who lost 100 percent of her retirement savings when the SEC shut down the company and its Caribbean-based bank. She told The Advocate there is overwhelming evidence of red flags the advisers should have seen:

“As we get deeper into this and see the tremendous amount of information that the (advisers) had … then it increasingly becomes an issue of a single trap baited at various points,” Mayhall said.
She said the advisers “knew, should have known, could have known, did know or just plain kept it under wraps.
“No matter how you look at it, the clients … were lured and trapped, then hung out to dry,” Mayhall said.

Investors believe they should recover some of their losses before any advisers’ funds are released. The issue of clawbacks against investors who cashed out or transferred money to other funds, including the potential clawback of their principal, is still tied up in court.

In a statement posted on his Web site, Janvey says, “The brokerage services performed by the financial advisors in exchange for the compensation payments were not legitimate and did not confer any benefit on their customers.” He also says the former advisers “have no rightful ownership interest that could justify their retaining possession of the funds.” Janvey is only attempting to recover commissions from Stanford brokers who received at least $200,000 in CD commissions during the past two years.

Arguing against the return of Stanford advisers' commissions, Janvey argues in court documents filed July 28: "New SIB CD purchase money funded loans, commissions, bonuses, and other compensation to financial advisors so they would be motivated to move their clients out of other legitimate investment vehicles and into fraudulent SIB CDs and to keep their clients’ money under the control of the Defendants [R. Allen Stanford et al]."

Read the rest of The Advocate story here.