Friday, July 17, 2009


Blue Eyed Dog , Baton Rouge LA 2008
All reproduction rights reserved Wm. Greiner

Anybody following the Stanford Financial case is familiar with the term "clawback". Clawback allows the prosecutors/courts to go after investors who received income from fraudulent investments or Ponzi schemes , a la Bernie Madoff . This is a cruel law which allows those who have already been victimized once to then get victimized again by the prosecutors/courts.

News Alert: Stanford receiver files new clawback lawsuit against investors

In a lawsuit filed Thursday, Stanford receiver Ralph Janvey claims that funds obtained as interest by five investors in Houston are fraudulent, and he has requested the court allow him to clawback slightly more than $3 million.

According to the lawsuit, the investors were in possession of illegitimate proceeds that were “paid from funds supplied by new investors who bought CDs after the Relief Defendants (the named investors) purchased their CDs.” They are: Jim Letsos, president of construction firm Letsos Company; Felipe Gonzalez, president of engineering firm Pegasus International; and investors Charlotte Hunton, Richard Huton and Charles Hunton of the Hunton Group, which provides industry, commercial and residential clients with Trane products.

The funds which Janvey says in the suit belong to the estate are held in Pershing, the clearing broker for many of the Stanford International Bank CDs. One legal argument Janvey presents for clawing back on the interest payments is that the investors did not perform a service for which they were being compensated and, thus, have no claim to the funds.

The court overseeing the receivership has imposed a deadline on Janvey for releasing funds held with Pershing or another clearing broker SEI to investors. In order to prevent the release of these funds, which Janvey says are illegitimate returns, he must file suit against investors and allow the court to rule on the argument. To read the full lawsuit, click here.

—Olivia Watkins . The Baton Rouge Business Report 7-17-09