A Financial Industry Regulatory Authority arbitration panel has ordered Pershing to pay a total of $648,543 to another group of investors who alleged they lost money in the Ponzi scheme run by financier R. Allen Stanford, who is serving a 110-year prison sentence.
Pershing did not immediately respond to a request for comment Friday, one day after the three-person FINRA arbitration panel made its decision and posted the award on the regulator's website.
In February 2020, a FINRA arb panel ordered Pershing to pay $5.6 million in damages to a group of 23 investors who claimed they lost money in the same Ponzi scheme. A three-person FINRA arbitration panel previously ordered Pershing to pay $1.4 million to another group of victims.
In the statement of claim in the most recent dispute, a group of investors asserted the following causes of action: aiding and abetting common law fraud, aiding and abetting breach of fiduciary duty, gross negligence, breach of contract, violation of FINRA conduct rules, and civil conspiracy to defraud.
The claimants alleged that Pershing, "acting as custodian and clearing firm for Stanford Group Company … gave material assistance to a Ponzi scheme, involving certificates of deposit" (CDs) issued by Stanford International Bank and recommended by SGC financial advisors. "Despite having concerns about the CDs and SGC," Pershing "continued to provide assistance" in the scheme, the claimants alleged.
