U.S. District Judge Robert Wilkins on Tuesday ruled that the Securities Investor Protection Corp. is not required to begin a claims process in Texas for the victims of R. Allen Stanford’s $7 billion investment fraud, Bloomberg News reported yesterday. Judge Wilkins said that regulators failed to show that the 7,000 brokerage clients who invested in the Ponzi scheme are entitled to have their losses covered by SIPC, a nonprofit corporation funded by the brokerage industry. The Securities and Exchange Commission told SIPC on June 15, 2001, to start a process that could grant as much as $500,000 for each Stanford client -- the same maximum amount it offers in any case. After SIPC balked, the SEC for the first time sued the congressionally chartered group.
