2009 Archives

Stanford receiver faces herculean task


The following is from the March 9, 2009, edition of Reuters.  Ralph Janvey is an adjunct professor in SMU's Dedman School of Law.

March 10, 2009

http://www.reuters.com/article/newsOne/idUSTRE52855D20090309By Chris Baltimore

HOUSTON (Reuters) — Life isn't easy for Ralph Janvey, the court-appointed receiver now overseeing the financial empire of Texas billionaire Allen Stanford, accused by U.S. regulators of carrying out a massive Ponzi scheme.

Janvey, a straight-talking, Dallas-based lawyer and adjunct law professor at Southern Methodist University, has taken the helm of Stanford Financial Group, after a U.S. judge tapped him to serve as the receiver, with final say over Stanford's vast estate of offices, island properties, yachts and castles.

So far, he has been sued by angry investors and had to fire 1,000 Stanford employees on Friday.

"Imagine being thrust in at the top of this company right now," said Michael Goldberg, an attorney with Akerman Senterfitt in Miami, who has served as a receiver in many other SEC cases. By all measures of the law Janvey "is Stanford now," Goldberg said.

It is not the best time to take charge.

The company is in "dire" financial condition, with "tens of millions of dollars" in unpaid bills, Janvey reported to U.S. Judge David Godbey last week. There is mounting evidence that estate assets will only provide a "fraction" of amount needed to cover claims, Janvey said. On Friday, Janvey slashed 1,000 Stanford jobs — about 85 percent of the company's workforce.

U.S. securities regulators have accused Stanford, his college roommate and three of their companies of carrying out a "massive Ponzi scheme" over at least a decade and misappropriating at least $1.6 billion of investors' money.

Charles Meadows, a Dallas-based lawyer representing Stanford, said in a filing that the allegations against his client are "false and the SEC has presented no evidence of any such Ponzi scheme." Janvey did not respond to multiple interview requests.

Alan Bromberg, a professor at the Dedman School of Law at SMU, once taught Janvey as a law student and described him as "one of the best I've ever had."

Now Bromberg is filling in for Janvey's evening class on regulation of securities markets — with about 25 students.

Read the full story.

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