The Securities Investor Protection Corp., called SIPC, said it will announce on or before Sept. 15 its decision on whether it will provide money to victims of the alleged investor bilking by Robert Allen Stanford.
Stanford is accused of taking $7.2 billion from investors as part of a Ponzi scheme. About 1,800 Louisiana investors allegedly were bilked of about $1 billion. Most of those allegedly cheated reside in the Lafayette, Baton Rouge and Covington region.
The Securities and Exchange Commission recently recommended SIPC reimburse any victims for their losses. The corporation should pay investors up to $500,000 each, the SEC said.
SIPC maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms. The SEC has sued Stanford alleging he orchestrated the fraud by making false promises of guaranteed returns related to certificates of deposit.
The court immediately issued a temporary restraining order, froze Stanford’s assets and appointed a receiver to marshal those assets. The SEC wants SIPC to create its own receiver in the matter.
Flood insurance extended
The U.S. House last week almost unanimously passed a five-year extension of the National Flood Insurance Program.
Homeowners and businesses in flood zones that have problems getting private coverage can obtain insurance backed by the federal government. Louisiana has 500,000 participants.
Under the reauthorization, which passed 406-22, homes and businesses with multiple claims could see a premium increase of 50 percent. High-risk properties could have rates raised 20 percent for four years.
Supporters fended off an amendment by U.S. Rep Candice Miller, R-Mich., who called for elimination of the program contending the federal government should not be in the insurance business.
The program is $18 billion in debt mostly from claims paid as a result of hurricanes Katrina and Rita in 2005.
Landrieu celebrates program
U.S. Sen. Mary Landrieu, D-La., was on hand this past week to celebrate the National Guard Youth ChalleNGe program.
The program, which targets high school dropouts, is a 17-month voluntary effort with a five-month residential phase and a 12-month mentoring phase. The goal is to enhance life skills, education levels, employment potential and prospects for the future by providing the opportunity to students to get their high-school diploma or GED certificate.
The program recently celebrated its 100,000th member. Landrieu, who co-chairs the National Guard Youth Foundation, said the federal government, which works with money from states and the private sector, should not target the program for any funding cuts.
Landrieu noted that 1.3 million youths drop out of high school, about one in three students.
“This is a real challenge for America,” Landrieu said. “This is one of the stronger programs that actually works.”
Vitter opposes debt plan
U.S. Sen. David Vitter, R-La., spent part of his time this past week in the middle of the national debt and federal deficit issue.
Vitter announced his opposition to a plan by Senate Minority Leader Mitch McConnell, R-Ky., that would give President Barack Obama the ability to raise the nation’s debt ceiling.
Vitter has pushed a plan called the Cut Cap and Balance Act, which would reduce spending, cap it and call for a balanced-budget amendment.
“Unfortunately, the McConnell proposal undercuts all of these efforts,” Vitter said in a statement. “It offers (Senate Majority Leader Harry) Reid and Obama everything they want — a $2.4 trillion increase in the debt limit.”
Later in the week, Vitter got a chance to ask questions of Federal Reserve Chairman Ben
Bernanke about the need for federal deficit cuts. Bernanke acknowledged that spending cuts should be part of the two-prong action to raise the debt and cut spending in order to improve the nation’s standing with bond rating agencies.
Richmond wins one for Dems
U.S. Rep. Cedric Richmond, D-New Orleans, starred in last week’s 50th Annual Congressional Baseball Game.
Richmond, a former varsity pitcher at Morehouse College, dominated the game, perplexing Republican batters with pitches that were clocked as high at 80 mph.
Democrats beat Republicans for the third year in a row, 8-2.
Compiled by Gerard Shields, chief of The Advocate’s Washington bureau. His email address is GerardShields@aol.com.