In response to growing investor displeasure, the Securities and Exchange Commission has confirmed it is opening an investigation into fees charged by the court-appointed receiver of Allen Stanford's $7 billion Ponzi scheme. The receiver, Ralph Janvey, was originally appointed by a Dallas federal judge at the request of the SEC following the exposure of Stanford's fraud. As reported by CNBC, the SEC is specifically looking into allegations of improper conduct of SEC employees.
As covered earlier by Ponzitracker, a group of Stanford investors displeased with Janvey's progress had filed a motion to intervene on July 7, alleging that the recovery to date had been largely consumed by fees paid to the receiver. In support, the investors claimed that, of the $120 million collected thus far to date by Janvey, nearly all - $118.2 million - had been paid to Janvey and his legal team as expenses, leaving just $1.5 million available to investors. Yet, according to the attorney for the investors bringing the motion, the SEC had not objected to any bill presented for payment by Janvey for over a year.
Further, the group alleged that an arrangement reached between Janvey and a court-appointed group supposedly responsible for overseeing the Receiver's actions was instead an improper arrangement in which the group would receive 25% of all future recovery of fraudulent transfer lawsuits.
An attorney for Janvey responded to the latest allegations, stating that Janvey would comply promptly to any inquiry, and that any allegations of an inside deal between Janvey and the investor committee was "patently false and completely irresponsible."