WASHINGTON (AP) — The Supreme Court is considering shutting down 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 lawsuit should proceed against individuals, law firms and investment companies that allegedly aided Stanford’s fraud. He was sent to prison after being convicted of what prosecutors termed a $7.2 billion Ponzi scheme on investors.
A lawyer for the defendants in the class-action suits said the lawsuits are blocked by the federal Securities Litigation Uniform Standards Act. But others argue the investment scheme is not covered by the law because the main part of the fraud involved certificates of deposit, not stocks and other securities.
Justices will make a ruling sometime next year.