On Monday, the Fifth Circuit heard oral arguments in the clawback case initiated by the receiver of Stanford International Bank, Ralph Janvey. The AmLaw Litigation Daily reports that Janvey is seeking to recover the principal certain investors withdrew from Stanford shortly before the alleged fraud was discovered, but was not permitted to do so by the district court.
The Fifth Circuit reportedly questioned whether Janvey even had standing to pursue such a case. “What gives you statutory authority to sue people the SEC did not?” Senior Judge Will Garwood asked. “It seems to me that the plaintiff or defendant ought to be the ones…Frankly, in a sense, you’re nobody. You are neither one.”
Attorney Michael Quilling, who represented the investors at the Fifth Circuit argument, told the AmLaw Litigation Daily that Janvey is being even more aggressive than the Madoff receiver, Irving Picard, who has gone after fictitious profits but not the principal of investors.