BATON ROUGE, La. — A jury decided that Louisiana’s Office of Financial Institutions was not at fault for $400 million in losses that retirees suffered because of Texas fraudster R. Allen Stanford’s massive Ponzi scheme.
The verdict came last week in state court in Baton Rouge after a three-week trial, The Advocate reported.
Stanford was sentenced to 110 years in prison after being convicted of bilking investors in a $7.2 billion scheme that involved the sale of fraudulent certificates of deposits from the Stanford International Bank.
Nearly 1,000 investors sued the Louisiana OFI after purchasing certificates of deposit from the Stanford Trust Company between 2007 and 2009. But attorneys for the state agency argued successfully that OFI had limited authority to regulate the assets and had no reason to suspect any fraudulent activity within the company before June 2008.
“Obviously, the class members are devastated by the recent ruling,” the plaintiffs’ lead attorney, Phil Preis, said in a statement after Friday's verdict. “This was the first Stanford Ponzi Scheme case to be tried by a jury of the victims’ peers. The class members had waited 15 years, and the system has once again failed them.”
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