Despite significant pressure from members of Congress, the SEC has decided to end a legal dispute with the Securities Investor Protection Corp. in which the SEC has pressed SIPC to pay investors harmed by Allen Stanford's $7 billion Ponzi scheme. On July 18, 2014, the U.S. Court of Appeals for the D.C. Circuit upheld a lower court decision against the SEC, agreeing with SIPC that there was no basis for SIPC to act because the Stanford CDs at issue came from the Antigua-based Stanford International Bank.
SEC spokesperson John Nester stated that after "very careful deliberation, the commission determined not to seek further review" of the decision, and that the SEC remains committed to helping the Stanford victims maximize their recoveries, the WSJ reports.
In July and August 2014, several senators and congressmen from states including Louisiana and Mississippi issued statements and wrote letters to SEC Chair Mary Jo White asking the SEC to continue its fight against SIPC by taking the matter to the U.S. Supreme Court.
A spokesperson from the Stanford Victims Coalition called the SEC's decision to end the lawsuit against SIPC "a complete injustice," noting that the only the SEC (and not the Stanford victims) has a private right of action against SIPC. The lawsuit is reportedly the only legal action the SEC had ever taken against SIPC since the fund was established in 1970.