A large New York law firm that once represented the now-imprisoned Texas financier Allen Stanford has reached a $35 million settlement with victims of his estimated $7.2 billion Ponzi scheme, Reuters reported yesterday. Chadbourne & Parke entered the accord on Feb. 25, two weeks before a federal appeals court said the firm and Proskauer Rose, which also represented Stanford, were immune under Texas law from liability for the victims' losses. The settlement was discussed in a filing last week with the federal court in Dallas. Roughly 18,000 of Stanford's former investors had sued both Chadbourne and Proskauer over work done for the swindler by Thomas Sjoblom, a lawyer who worked at both firms. Investors said the firms turned a blind eye to Stanford's sale of fraudulent high-yield certificates of deposit through his Antigua-based Stanford International Bank, and obstructed a related U.S. Securities and Exchange Commission probe. Stanford is serving a 110-year prison term after being convicted of fraud in March 2012. His scheme surfaced in 2009. The Chadbourne settlement resolves claims by Ralph Janvey, a court-appointed receiver for Stanford's companies, and by a committee of Stanford investors helping him recover money for creditors. Read more.
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