SIPC is ripped on Stanford

A US senator attacked an industry-backed fund that covers claims for investors of failed brokerages, saying the fund was failing to help people who had been victimized by convicted financier Allen Stanford’s $7 billion Ponzi scheme.

Louisiana Senator David Vitter’s criticism of the Securities Investor Protection Corp. came one day after a jury in Texas convicted Stanford of carrying out the elaborate fraud.

SIPC has argued that it cannot help Stanford’s victims because the bogus certificates of deposit involved in the fraud were issued by Stanford’s offshore bank and not by Stanford Group, the SIPC-member brokerage based in Texas.

Meanwhile, Stanford’s jury heard evidence on federal prosecutors’ request that he forfeit $300 million in assets.

On Tuesday, a jury convicted Stanford on 13 of 14 charges carrying maximum penalties of 20 years in prison. No sentencing date has been set.