FINRA Panel Tags Pershing LLC in Stanford Scheme

By August 23, 2021 Ponzi Scheme

A FINRA arbitration panel recently ruled for investors against clearing house Pershing LLC (“Pershing”) relating to Pershing’s involvement with the Stanford Ponzi scheme.

In Cagle et al v. Pershing LLC, the Claimant investors alleged that Respondent Pershing, while “acting as custodian and clearing firm for Stanford Group Company (“SGC”), gave material assistance to a Ponzi scheme, involving certificates of deposit (“CDs”) issued by Stanford International Bank, Ltd. (“SIBL”) and recommended by SGC financial advisors,” according to the FINRA award. The Claimants further alleged that “despite having concerns about the CDs and SGC, Respondent continued to provide assistance.”

In ruling for the Claimants, the Panel released the following Explained Decision:

“The Panel finds that, based on all of the evidence and testimony presented, by the beginning of 2008, Respondent had the requisite level of knowledge, as to SGC’s wrongful conduct in connection with the CD scheme, that it knew or should have known that it was providing meaningful/substantial assistance to that wrongful scheme by remaining the clearing firm for SGC in the United States and, more particularly, by facilitating wire transfers for the purchase of CDs issued by SIBL on behalf of Charles A. Pope, Dudley Devore IRA, and Joyce E. Cagle during 2008.”

The Panel made the following awards for compensatory damages:

  • Charles A. Pope: $436,000
  • Dudley Devore IRA: $124,593
  • Joyce E. Cagle: $87,200

Fishman Haygood’s Investment Fraud Division has experience bringing claims on behalf of investors who were the victims of Ponzi schemes, including against Allen Stanford.

If you believe you have suffered losses an investment scheme, please contact us to discuss your possible claim