Stanford Financial Receiver Paying Out Funds, But Many Victims Have Sold Their Claims to Hedge Funds

Victims of Stanford Financial’s Fraud Scheme May Soon Be Paid. Some Already Sold Their Claim

It has been 15 years since Thomas Swingle first learned that about $1 million of his family’s savings had gone up in smoke, after the financier Robert Allen Stanford was exposed for having sold billions in fraudulent certificates of deposit to investors around the world.

The memory of those days is still painful.

“It was literally a life-changing event,” Mr. Swingle, 72, said of the $7 billion scheme, which unraveled in early 2009. “It is like someone hit you in the chest with a sledgehammer.”

Now, victims of Mr. Stanford’s company, Stanford Financial, are on the verge of recouping some of their losses, but Mr. Swingle and his wife, Cindy Finch, have to contend with another decision they made: In 2021, they agreed to sell their claim to any future settlement to an investment fund for around $60,000.

That means they won’t get a penny of the funds that are about to be disbursed. Instead, they will all go to the claim buyer.

The crypto executive who could soon be running the SEC

Robinhood Chief Legal Officer Dan Gallagher is emerging as a leading contender to head the Securities and Exchange Commission should Donald Trump win back the presidency, according to a dozen former top regulators, lobbyists and securities lawyers.

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Other names floating around K Street as potential SEC chairs under Trump include former Commodity Futures Trading Commission Chair Chris Giancarlo, who is known online as “CryptoDad”; former SEC General Counsel Robert Stebbins, now a partner at the law firm Willkie Farr & Gallagher; and current SEC Commissioner Hester Peirce, who occupies a Republican seat on the agency’s five-person commission.

Yet Gallagher’s ascendancy to the chair has long been a matter of when, not if, for some Republicans.

Retail Investor Had Too Much Tesla

On Friday, Bloomberg’s Zeke Faux and Christine Dobby reported on a lawsuit filed by a Canadian carpenter who allegedly made hundreds of millions of dollars day-trading Tesla options and went to Royal Bank of Canada to ask them what to do about it, and they were allegedly like “have you considered putting 200% of your net worth into Tesla options?”

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Insane! One thing that has always puzzled me about retail financial advice is that people like to ask you about your risk tolerance, like that’s a thing that you could know. But I suppose if you walk into a financial adviser’s office and are like “I have $300 million and it’s all in Tesla options,” she will pull up her new client intake form, and there will be a field for “what is the client’s risk tolerance on a scale of 1 to 10,” and she will write “eight thousand,” and the advice will proceed on that basis. Man if I made $300 million trading Tesla options my risk tolerance would then be zero forever. I would put everything in Treasury bills and gold bars and New Zealand bunkers and $100 bills sewn into my mattress. Nobody stays that lucky for long!

Attacks on Agency In-House Judges Heat Up, Blunting Enforcement

Agencies face an increasing number of lawsuits challenging the constitutionality of their administrative law judges, with some companies winning temporary enforcement reprieves as courts wrestle with litigation.

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While challengers often bring several constitutional claims against administrative law judges, the most common allegation is that they are improperly shielded from being removed.

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The US Court of Appeals for the Fifth Circuit ruled that the Securities and Exchange Commission’s in-house judges are improperly shielded, creating a precedent that hamstrings agencies in Texas, Louisiana, and Mississippi. More cases are pending that could deepen the split among circuit courts.