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SEC Lawyer Argues Stanford Victims Were SIPC ‘Customers’

The Securities Investor Protection Corp., an industry fund that covers losses from brokerage firm failures, must compensate victims of Allen Stanford’s $7 billion Ponzi scheme because they were customers of a U.S.-based brokerage, a government lawyer told an appeals court.

“We’re not claiming that anyone is covered who did not have a brokerage account” with Houston-based Stanford Group Co., U.S. Securities and Exchange Commission attorney John Avery told a panel of the U.S. Court of Appeals today in Washington. “That’s how they got sucked into this scheme.”