NY law firms win Stanford fraud appeal, dismissal of lawsuit

(Reuters) – Two big New York law firms that represented the now-imprisoned financier Allen Stanford persuaded a federal appeals court yesterday to throw out a lawsuit claiming that they helped conceal his $7.2 billion Ponzi scheme.

Reversing a lower court ruling, the 5th U.S. Circuit Court of Appeals in New Orleans said Chadbourne & Parke and Proskauer Rose were immune from liability for losses that 18,000 former Stanford investors blamed in part on Thomas Sjoblom, a lawyer who had represented the financier and worked at both firms.

The investors claimed that the law firms knew Stanford had been selling fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank, and that the firms obstructed a related U.S. Securities and Exchange Commission probe.