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SEC Ordered to Defend Negligence Case Over Stanford Ponzi Scheme

The U.S. Securities and Exchange Commission must defend a negligence lawsuit alleging that the agency failed to act appropriately after concluding that R. Allen Stanford was operating a Ponzi scheme, a judge ruled.

Investors Carlos Zelaya and George Glantz may proceed with a claim that agency examiners determined four times before 2009 that Stanford was running a Ponzi scheme, U.S. District Judge Robert Scola Jr. ruled yesterday in federal court in Miami. Stanford is serving 110 years in prison for his $7 billion fraud.