Last month, the U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court decision in a case where the SEC had sought to compel the the Securities Investor Protection Corp. to liquidate Stanford Group Co. — Allen Stanford’s U.S.-based broker-dealer. In 2011, SIPC concluded that there was no basis for it to initiate a proceeding to protect customer property under the Securities Investor Protection Act because the Stanford CDs at issue came from the Antigua-based Stanford International Bank. Because the SIPC decision left many investors without any way to recover their Stanford-based losses, the SEC commenced the lawsuit against SIPC, which was reportedly the first legal action the agency had ever taken against SIPC since the fund was established in 1970.
