On March 12, 2009, U.S. District Court Judge David C. Godbey issued an order at the request of Stanford court-appointed receiver Ralph S. Janvey unfreezing approximately 16,000 Stanford investor accounts at Pershing LLC and J.P. Morgan Clearing Corp., unless an exception described in the order applies.
Previously, on March 5, 2009, Judge Godbey issued an order at the receiver's request unfreezing approximately 12,000 Stanford investor accounts held at Pershing LLC. The court's order applies to customer accounts valued at $250,000 or less as of month-end February 2009.
Customers can immediately begin the process of obtaining control of their accounts by arranging to transfer their accounts to a new broker-dealer. To do so, the customer should make arrangements with the new broker-dealer to open a new account.
Typically, the first step in opening a new account is for the customer to obtain and complete an account transfer form and a new account opening form. These forms are available from broker-dealers directly or on their Web sites. The completed forms are then submitted to the new broker-dealer who in turn will provide appropriate instruction to Pershing LLC and J.P. Morgan Clearing Corp. regarding the transfer of the accounts. There is typically a small fee associated with the transfer of accounts from one broker to another.
The court has authorized the release of these accounts unless any of the following conditions apply:
- They are owned by Stanford shareholders, directors, and certain employees.
- They are owned for the benefit of Stanford companies.
- They are managed by Stanford companies.
- They secure unpaid balances owed by customers or non-purpose loans made to customers.
- They are related to accounts in any of these categories by social security number, address or other similar indicators.
- Press Release: SEC Charges R. Allen Stanford, Stanford International Bank for Multi-Billion Dollar Investment Scheme (2/17/09)
- SEC Statement on the Case Against R. Allen Stanford (2/19/09)
The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.