Stanford CD Class Action Lawsuit Filed by Defrauded Investors
A class action lawsuit has been filed against Stanford Group Co., Stanford Financial Group and other related entities on behalf of investors who lost money in a $9.2 billion investment fraud uncovered this week.
On Tuesday, the U.S. Securities and Exchange Commission filed civil charges alleging fraud by misleading investors about high-yield certificates of deposit (CDs) sold by an offshore bank in Antigua controlled by Texas billionaire Allen Stanford. They are accused of making false promises and providing fake double digit returns.
Investors who purchased Stanford International Bank CDs have now lost most if not all of their investment, as the SEC can not account for $8 billion.
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The Stanford class action lawsuit was filed late Tuesday in the U.S. District Court for the Southern District of Texas by four investors who allege that they lost $1.75 million in Stanford CDs.
The certificates of deposit were sold as a liquid and secure investment and the historical performance records were grossly misrepresented. Many financial advisors pushed investors into these CDs, as Stanford Group rewarded them with high bonuses for selling their products.
A number of investors are also considering individual Stanford lawsuits and arbitration claims against the brokers and financial advisors who recommended these products, as questions had been raised by some about how Stanford Group could pay 7% interest rates on investments of $100,000.
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