WASHINGTON — The Supreme Court on Monday debated whether to allow continued class-action lawsuits from investors who lost billions in former Texas tycoon R. Allen Stanford’s massive Ponzi scheme.
Justices listened to lawyers argue over whether lawsuits should proceed against individuals, law firms, and investment companies that allegedly aided Stanford’s fraud.
Stanford was sent to prison for 110 years after being convicted of what prosecutors termed a $7.2 billion Ponzi scheme on investors. The fraud stemmed from the sale of certificates of deposits from the Stanford International Bank that supposedly were backed by safe investments. But those investments did not exist.
At issue before the court is whether the federal Securities Litigation Uniform Standards Act, a federal law aimed at limiting private lawsuits that allege securities fraud, can be used to block the suits investors filed in Louisiana and Texas.
Justices will make a ruling sometime next year.