U.S. arbitration panel sides with Pershing in Stanford Ponzi case
By Suzanne Barlyn
Nov 6 (Reuters) - A securities arbitration panel in New Orleans has ruled that Pershing LLC is not liable for a group of investors' $80 million in losses tied to Allen Stanford's $7 billion Ponzi scheme.
The 85 investors filed their claim in 2013, alleging that Pershing, a unit of the Bank of New York Mellon Corp, breached its duty to act in their best interests and should have known that Stanford was running a fraud, according to the statement of claim in the case.
Stanford, once a prominent investment tycoon, is serving a 110-year prison term following his March 2012 conviction for running an estimated $7.2 billion fraud.
The scheme, which collapsed in 2009, was centered on bilking investors with fraudulent certificates of deposit issued by his Antigua-based Stanford International Bank.
The Financial Industry Regulatory Authority arbitration panel ruled in a written decision on Monday. The panel did not explain its reasons, as is typical of FINRA arbitration rulings.
In February, the U.S. Supreme Court ruled that investors in Stanford's Ponzi scheme can sue to recoup losses from lawyers, insurance brokers and others who worked with the convicted swindler.
Brokerages generally require investors to resolve any future legal disputes against their firms through FINRA's arbitration system, instead of in court.
Pershing cleared transactions for a brokerage affiliated with Stanford, which sold the CDs to investors. Continuación...