Friedman Kaplan and Co-Counsel Secure $1.6 Billion in Settlements in Stanford Ponzi Litigation

Friedman Kaplan’s client, the Official Stanford Investors Committee (“OSIC”), achieved a series of major settlements to end long-running litigation arising out of R. Allen Stanford’s Ponzi scheme, which ended in 2009 and was one of the largest financial frauds in U.S. history. In 2012, Stanford was convicted and sentenced to a 110-year prison term for stealing billions of dollars from investors who purchased purported certificates of deposit from his offshore bank.

On behalf of OSIC, which was formed in 2010 to pursue claims relating to the Stanford fraud, Friedman Kaplan and co-counsel prosecuted investor and estate claims in Texas federal court against five banks, including Toronto-Dominion Bank, HSBC Bank plc, and Société Générale Private Banking (Suisse), S.A., for, among other things, aiding and abetting violations of the Texas Securities Act and knowing participation in Stanford’s breach of fiduciary duty. OSIC’s recovery against the banks of $1.6 billion follows thirteen years of vigorous litigation involving issues of U.S., Canadian, English, and Swiss law, extensive motion practice, and nearly a hundred fact and expert depositions in the U.S. and abroad.

“We are thrilled with the recovery achieved for the Stanford investors. The case was hotly litigated for the last thirteen years, including successfully defending against innumerable motions to dismiss and summary judgment motions. I’m exceedingly proud of our team and co-counsel for everyone’s tireless work in securing this fantastic outcome for our clients,” said Friedman Kaplan partner Scott M. Berman. In addition to Scott, the Friedman Kaplan litigation team included Philippe Adler, David J. Ranzenhofer, and Geoffrey Cajigas.

The multi-district litigation, Rotstain et al. v. Trustmark National Bank et al., had been scheduled to begin trial on February 27 before Judge Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas. A number of national publications and news outlets have reported on these extraordinary settlements, including Law360, Texas Lawyer, and the New York Times (subscriptions required).