U.S. Sen. David Vitter today announced that he will block the nominations of two Securities and Exchange Commission members until the SEC responds to a request by victims of the alleged Stanford Group Co. Ponzi scheme who are seeking to receive Securities Investor Protection Corporation coverage for their losses.
"Unfortunately, the SEC has not yet given the Stanford victims an answer despite my repeated conversations with Chairwoman Mary Schapiro," said Vitter. "Many of these folks in Louisiana and along the Gulf region lost their life savings, and they at least deserve a direct answer on their request for coverage. After months of delay the commission has now met a number of times to consider SIPC coverage for Stanford's victims. It would be salt in the wound of these victims for Congress to force those discussions to start over by approving new commissioners.
"We've known for some time that the SEC waited far too long to take action against Allen Stanford, and now they're dragging their feet in responding to the victims. I will continue to hold them accountable -- including holding these nominations -- until these fraud victims get an up-or-down answer from the SEC on SIPC so they can move forward in the process, and if necessary, file a judicial appeal."
At a U.S. Senate Banking Committee hearing last year, Vitter raised concerns about the SEC's misleading statements about its handling of the Stanford case. An Inspector General's report showed the SEC's examination office had been looking into the Stanford Group since 1997 and were concerned it was a "possible Ponzi scheme," but at a previous banking committee hearing, SEC officials claimed the investigations only began in 2004.
The SEC has five commissioners who are appointed by the President with the advice and consent of the Senate. Mr. Daniel M. Gallagher has been nominated to fill the seat being vacated by Commissioner Kathleen Casey and the Honorable Luis Aguilar is being re-nominated because the term for which he is now serving expires June 5, 2010. Vitter is concerned that because the Commission has claimed to be close to a ruling, bringing a new commissioner into the mix would unnecessarily slow down the pace.