re: How will BR/LSU/TAF handle the Stanford crisis?

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No ‘Enron-sized scandal’

The SIPC will restore missing securities to eligible shareholders up to $500,000 in value, and cash up to $100,000. It does not cover market losses. Intact accounts would be transferred to other brokerages, as Lehman Brothers accounts were after the company went bankrupt last year, SIPC spokeswoman Ailis Aaron Wolf said.

Ineligible shareholders include general partners, officers or directors of the failed or troubled firms.

Stanford Financial is an SIPC member, Wolf said.

Meanwhile, investors are starting to go to court. A federal class-action suit was filed late Tuesday seeking compensation for 30,000 investors. Houston lawyer Patrick Zummo, who is crafting a state court lawsuit on investors’ behalf as well, compared the Stanford scandal to Enron.

“It’s not an Enron-sized scandal, but as far as Houston’s concerned, it’s the worst financial scandal since then,” he said.

But for now, the Walshes and other investors have to wait for answers.

“We have lived within our means all our lives. We saved regularly. We’re frugal. The idea that someone could do this to ordinary people who trust them and believe in them is shocking,” Sandra Walsh said.