TUPELO – Current and former Major League Baseball players, Tupelo-based American Family Association and Corinth’s Mississippi Polymers Inc. are among hundreds of former Stanford Financial Group investors who thought they had dodged the bullet of SFG’s crash when they pulled their funds out months before.
But the court-appointed receiver Ralph S. Janvey has their $800 million-plus on ice right now, until the Fifth Circuit Court of Appeals decides who can keep the money, which he describes as innocently derived ill-gotten gains.
The money in question is called “claw backs” and these cashed-out investors and advisers are termed “relief defendants.”
The names are included in a Texas court document filed recently by Janvey.
Among other assets on hold by the receiver are money, homes and even clothing belonging to Stanford executives under criminal accusations alleging they engineered the $8 billion Ponzi scheme to defraud more than 20,000 investors.
Clement in list
Former Stanford financial adviser Neal Clement of Saltillo is listed among the “relief defendants.”
His father, Dr. Aubrey O’Neal Clement, recovered $8,524,408 by cashing in his Stanford CDs, while the AFA regained $5,722,450.
In a recent Lee County lawsuit, Walt Walton of Tupelo claims Neal Clement told him he had withdrawn his father’s CD investments as Walton sought unsuccessfully to safeguard his own life savings with Stanford. Walton claims Clement knew things were going downhill at Stanford and should have told him.
Neal Clement’s attorney, William F. Ray of Jackson, termed his client “a victim of the Stanford failure,” saying Clement’s own accounts have been frozen.
He also said the receiver’s effort to gain Clement’s work compensation “is unfair and improper” and that Clement had no reason to suspect problems at Stanford.
Patrick Vaughn, AFA’s general counsel, said Wednesday it was he, not Clement, who moved to recover AFA’s investments.
Now, it’s in federally insured Renasant Bank.
“But if the court claws them back, we would lose them,” Vaughn noted.
MPI in jam, too
Stanford’s assets were frozen Feb. 16 when the U.S. Securities & Exchange Commission sued company executives and sent it into receivership after it became apparent Stanford didn’t have enough money to fill cash-ins from thousands of customers suddenly worried about the crumbling world financial sector.
Corinth-based Mississippi Polymers Inc. invested $556,363 and is among the relief defendants.
Company President Jerry Waxman declined to comment on MPI’s situation with the receivership.
At issue now before the Fifth Circuit is the July 31 U.S. District court decision that the “claw backs” are not allowed under law. Oral arguments on the issue are set for Nov. in New Orleans.
“The fact that the relief defendants are innocent and committed no wrongdoing does not entitle them to retain proceeds received from the fraudulent SIB CDs,” Janvey adds.
All Stanford investors making claims against the company will have a chance to get some money back when the receiver’s distribution begins. When that will be is unknown.
For more details and the identities of those MLB players, read Friday’s Daily Journal.
Contact Patsy R. Brumfield at (662) 678-1596 or firstname.lastname@example.org. Read Patsy’s blog, From the Front Row, on NEMS360.com for Neal Clement’s attorney’s full statement about his situation.