HOUSTON (AP) — Investors who lost billions in a massive Ponzi scheme orchestrated by convicted former Texas tycoon R. Allen Stanford have won a legal victory as a federal appeals court is letting their class action lawsuits go forward against individuals and companies they allege aided the financier’s fraud.
The 5th U.S. Circuit Court of Appeals on Monday overturned a federal judge’s ruling from last year that threw out three class action lawsuits which are trying to use state laws to recover investor losses resulting from Stanford’s scheme.
The judge had ruled the lawsuits were subject to a federal act that prevents them from being filed under state law.
Angela Shaw, who founded the Stanford Victims Coalition, which represents investors, called the ruling “fantastic news.”
Approximately $1 billion of the more than $7 billion in losses occurred with investors in the Baton Rouge, Lafayette and Covington areas, Baton Rouge attorney Phillip W. Preis and state Rep. Bodi White, R-Central, estimate.