US judge OKs indefinite freeze of Stanford assets

DALLAS, (Reuters) – A federal judge has granted  the U.S. government’s request to indefinitely freeze the assets  of Texan financier Allen Stanford, whom regulators have accused  of running a massive Ponzi scheme. and three of his companies.
U.S. District Judge David Godbey also agreed to release  most brokerage accounts over $250,000 that have been frozen  since the U.S. Securities and Exchange Commission accused  Stanford of an $8 billion fraud scheme involving certificates  of deposit.

At a brief hearing in federal court in Dallas, Godbey  agreed to the SEC’s request for a preliminary injunction that  freezes Stanford assets until a trial in the civil lawsuit is  complete. The three group companies involved are Stanford  International Bank, Stanford Group Co and Stanford Capital  Management. The original temporary restraining order freezing  the assets was set to expire on Thursday.

Godbey also approved a plan submitted by court-appointed  receiver Ralph Janvey to release most customer brokerage  accounts with a net asset value of $250,000 or more, brokerage  accounts held by JP Morgan Clearing Corp and brokerage accounts  managed by Stanford companies.

Hundreds of Stanford investors have sued Janvey to get  access to their accounts.
The release would affect about 16,000 accounts with about  $4.1 billion in assets, with about 4,000 accounts with assets  of $1.8 billion still subject to the freeze, based on data in  court document filed by Janvey.

Accounts with net assets of less than $250,000 held at  Pershing LLC have already been released.
Stanford and his top aide, James Davis, are accused by the  SEC of a massive Ponzi scheme involving high-yield certificates  of deposit (CDs) issued by Stanford’s offshore bank in  Antigua.

Both have asserted their constitutional right to avoid  self-incrimination and have declined to cooperate in the  government’s probe.

Charles Meadows, a Dallas-based lawyer who had previously  represented Stanford, said in a recent filing that the  allegations against his client are “false and the SEC has  presented no evidence of any such Ponzi scheme.” Meadows yesterday filed notice that he no longer represents Stanford,  leaving Stanford’s legal representation unclear.

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