A bipartisan group of congressional lawmakers is urging a U.S. regulator to shake up the receivership cleaning up after R. Allen Stanford ’s $7 billion Ponzi scheme, saying the money recovered from the fraud is insufficient, WSJ Pro Bankruptcy reported. The lawmakers asked Securities and Exchange Commission Chairman Jay Clayton in a letter last week to consider intervening in the court-supervised receivership of Stanford International Bank, the defunct institution that carried out the fraud exposed in 2009. Stanford is serving a 110-year prison sentence in Florida after his 2012 conviction on 13 felony counts. He has petitioned several courts to free him and has published a book saying prosecutors made him a scapegoat. Liquidators have spent a decade selling assets, suing alleged beneficiaries of the Ponzi scheme and distributing the proceeds. But the amount of money recovered for victims has been insufficient, said the lawmakers, including Reps. Al Green (D-Texas), Matt Gaetz, (R-Fla.) and Cedric Richmond (D-La.). Only a fraction of the money lost in the fraud has been recovered, according to court records. “We hope you agree that it is completely unacceptable that the Stanford Ponzi scheme victims have recovered pennies on the dollar over the past 11 years,” the lawmakers wrote in the letter to Clayton. “While some of these individuals have become infirm or passed away over this time, thousands of others still await economic justice.” The lawmakers urged Mr. Clayton to shake up the receivership proceeding, including by cracking down on professional fees and possibly petitioning a federal court to replace the receiver. While the receivership had brought in more than $681 million as of April, professional fees totaled $216 million, nearly as much as the $221 million distributed to victims, according to court records.
