NY law firms win Stanford fraud appeal, dismissal of lawsuit
By Jonathan Stempel
March 10 (Reuters) - Two big New York law firms that represented the now-imprisoned financier Allen Stanford persuaded a federal appeals court on Thursday to throw out a lawsuit claiming that they helped conceal his $7.2 billion Ponzi scheme.
Reversing a lower court ruling, the 5th U.S. Circuit Court of Appeals in New Orleans said Chadbourne & Parke and Proskauer Rose were immune from liability for losses that 18,000 former Stanford investors blamed in part on Thomas Sjoblom, a lawyer who had represented the financier and worked at both firms.
The investors claimed that the law firms knew Stanford had been selling fraudulent high-yielding certificates of deposit through his Antigua-based Stanford International Bank, and that the firms obstructed a related U.S. Securities and Exchange Commission probe.
Stanford, 65, was convicted of fraud in March 2012 and is serving a 110-year prison term. His scheme was revealed in 2009.
Lawyers for the investors did not immediately respond to requests for comment.
The lawsuit had made it to the U.S. Supreme Court, which in February 2014 allowed it to proceed.
It then returned to the courtroom of U.S. District Judge David Godbey in Dallas, who last March rejected the law firms' arguments that they deserved immunity under Texas law.
But the Texas Supreme Court later ruled in a different case that it was not enough to claim that a lawyer's conduct was "fraudulent" to overcome the immunity that the lawyer enjoys when representing clients. Continuación...