Attorneys for 900 people across 37 states, including Louisiana, who invested and lost their life savings to former Texas tycoon R. Allen Stanford's massive Ponzi scheme are hoping an appellate court will revive their decade-old federal class-action lawsuit.

U.S. District Judge Brian Jackson, of Baton Rouge, threw out the suit in July, dismissing the lone remaining defendant in the federal suit, SEI Investments Co., of Pennsylvania.

In documents filed recently at the 5th U.S. Circuit Court of Appeals in New Orleans, Baton Rouge lawyer Phil Preis said the victims, including dozens from the Baton Rouge area, invested in $200 million of worthless Stanford International Bank CDs.

SIB was located in the Caribbean island of Antigua.

Those CDs were administered by Louisiana-chartered and Baton Rouge-based Stanford Trust Co. and SEI Investments, according to Preis.

SEI, an international financial services firm, administered the Stanford Group Co. investments.

The suit alleges SEI performed the accounting and reporting of the IRA investments and "actively and materially aided" Stanford Trust Co. and the Stanford Group to "perpetuate the massive Ponzi scheme."

SEI denies those allegations.

Many of the dozens of local victims of the Ponzi scheme are retirees from Exxon and other plants along the Mississippi River.

"Substantially all of the investors were unaccredited, unsophisticated investors that rolled their pension plan lump sum payments from their former employers after retirement into these IRA accounts at (Stanford Trust Co.) and who relied on reports generated and sent by SEI to them and to the Internal Revenue Service on their behalf reporting the fair market value of the SIB CDs," Preis wrote in the documents filed at the 5th Circuit.

Preis claims SEI was "the de facto trustee of the IRAs" as a result of the comprehensive administrative and operational support provided by SEI to Stanford Trust Co. from Stanford Trust's opening in 1998 to its closing in 2009.

"Financial advisers for Stanford told investors their money was safely held in CDs at Stanford International Bank. The money for the CDs, however, funded the lavish lifestyle of Allen Stanford, who took more than $7 billion from victims worldwide.

"At a minimum," Preis contends in the documents filed at the 5th Circuit in late November, SEI owed a duty to the unsophisticated IRA holders and the IRS "to serve as a gate keeper for the distribution of false information."

SEI's response to Preis' court filing is due at the 5th Circuit in mid-January.

In his July ruling, Jackson said SEI's liability under the "control-person" provision of Louisiana Securities Law is the issue, and he wrote that the undisputed facts show SEI did not control Stanford Trust's primary violations of the state's security law.

Preis argues the judge improperly applied the legal standard for what constitutes a control person.

Preis has said the judge's decision "unjustly deprives these aging retirees a chance to redress the harm they suffered and for which they have been waiting for over a decade to rectify."

The class action suit was filed against SEI and the Louisiana Office of Financial Institutions. The claims against OFI are pending in Baton Rouge state court, but the main focus of the litigation is on SEI in federal court.

OFI is accused of turning a blind eye to Stanford's fraud scheme. But OFI has stated in court filings that it doesn't guarantee that investors in companies the agency regulates, such as Stanford Trust Co., won't lose money to fraudulent conduct.

Allen Stanford is serving a 110-year prison sentence for the Ponzi scheme. He was convicted of fraud in 2012.

In a Ponzi scheme, named for the 1920s swindler Charles Ponzi, the operator pays returns to early investors by funneling to them the money put in by later investors, rather than with any profits earned by shrewd trading. The apparent high rate of return lures new investors and reinvestments.

Ponzi schemes collapse, as Stanford's did, when sufficient numbers of prospective new investors can't be persuaded to add more money to the pot, and periodic payments cease.

Email Joe Gyan Jr. at jgyan@theadvocate.com.