HOUSTON (CN) – The Securities and Exchange Commission wrongfully froze the assets of account holders in Stanford Financial Group’s Houston and Antigua institutions when it shut down the company’s operations based on allegations of fraud, a Stanford investor claims in Federal Court.
J. Mark Brewster says his funds are being held for Stanford Financial by Pershing LLC, an investment firm affiliated with the Bank of New York Mellon, but the SEC prohibits Pershing from allowing him and other Stanford investors access to the $50 billion in savings Pershing is holding.
Brewster claims the SEC violated due process by to obtaining orders from a federal judge in Dallas when the courthouse was closed for President’s Day “without notice to anyone and without an opportunity to be heard by anyone.”
“There were no members of the public present,” Brewster says. “Instead the SEC lawyers simply provided a written statement to the court to act without any ‘notice or hearing.'”
They used these orders to shut down Stanford Financial’s Houston offices, and to appoint Ralph Janvey, a Dallas lawyer in private practice, as receiver to manage Stanford customers’ $50 billion in assets.
“The order gives absolutely no information about (Janvey) not even his address or phone number,” Brewster says. “Only the SEC knows him.
“How he came to be selected by the SEC as the agency’s favored take-over specialist is shrouded in mystery in violation of due process and without any transparency,” Brewster states.
U.S. Marshals carried out the SEC’s order to shut down Stanford Financial’s offices in Houston and Antigua on Feb. 16, based on allegations that the company was running an $8 billion Ponzi scheme.
But Brewster complains, “The SEC’s motion is full innuendo, bravado and hyperbole, but lacks any facts to the alleged violations by SFG or why seizure of innocent investors’ accounts is warranted.”
Brewster is represented by Sondra Jurica.