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Eppenstein and Eppenstein is a respected New York-based securities fraud and commercial litigation law firm with a global practice, widely known nationally and in the international community for protecting the rights of defrauded investors and businesses, as well as for obtaining record-setting arbitration awards for our clients. The firm's Securities Law Arbitration website traces our 25 year history of successful representation of investors. Contact us today to discuss your potential claims.

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Stanford’s Madoff Connection

February 20th, 2009 by Madelaine Eppenstein

“I think when the red flags get disclosed -  not all of them are out there yet – that will clear the air and lawyers can then decide what’s the best course of action for their clients to take . . . . We need to see who did what.”

Ted Eppenstein, interviewed by Kristin McNamara, Dow Jones Newswire (February 19, 2009)

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Indeed, as described in the SEC civil complaint, investors and others appear to have been taken twice over by Allen Stanford’s and his confederates’ “web” of related companies, Stanford International Bank, Ltd, Stanford Group Company and Stanford Capital Management:

“Contrary to [the bank's] representations, SIB’s investment portfolio was not invested in liquid financial instruments or allocated in the manner described in its promotional material and public reports. Instead, a substantial portion of the bank’s portfolio was placed in illiquid investments, such as real estate and private equity. Further, the vast majority [of] SIB’s multi-billion dollar investment portfolio was not monitored by a team of analysts, but rather by two people-Allen Stanford and James Davis. And contrary to SIB’s representations, the Antiguan regulator responsible for oversight of the bank’s portfolio, the Financial Services Regulatory Commission, does not audit SIB’s portfolio or verify the assets SIB claims in its financial statements. Perhaps most alarming is that SIB has exposure to losses from the Madoff fraud scheme despite the bank’s public assurances to the contrary.” (SEC Complaint at 3-4)

We can now visualize how complicated things can get for investors when a scheme as seemingly vast as Madoff collides with that of Stanford:

 ”In a December 2008 Monthly Report, the bank told investors that their money was safe because SIB ‘had no direct or indirect exposure to any of [Bernard] Madoff’s investments.’ But, contrary to this statement, at least $400,000 in Tier 2 was invested in Meridian, a New York-based hedge fund that used Tremont Partners as its asset manager. Tremont invested approximately 6-8% of the SIB assets they indirectly managed with Madoff’s investment firm.”  (SEC Complaint at 14)

The disastrous consequences for unsuspecting investors has only been magnified by the lack of transparency, oversight and truth seemingly present in both schemes.

Contact Ted Eppenstein at 212-679-6000 or teppenstein@eppenstein.com to discuss your situation.

 

 

 

 

Posted in Securities Arbitration & Litigation

The Arbitration Fairness Act of 2009

February 13th, 2009 by Madelaine Eppenstein

As predicted, with the advent of a new administration in Washington the Arbitration Fairness Act is back on track.  Representative Hank Johnson, Jr. (D-GA) re-introduced the legislation now known as the “Arbitration Fairness Act of 2009″ (H.R. 1020) on February 12, 2009.  Ted Eppenstein testified at hearings on October 25, 2007 before the U.S. Congress House Judiciary Committee, Subcommittee on Commercial and Administrative Law in support of predecessor legislation, H.R. 3010, the “Arbitration Fairness Act of 2007.”

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Posted in Securities Arbitration & Litigation