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Willis Group said Stanford investments were safe

As reported in the Sun Sentinel (http://www.sun-sentinel.com/news/nationworld/sns-ap-us-stanford-willis-lawsuit,0,2770364.story), a lawsuit seeking class-action status for hundreds of Latin American investors claims that a London-based insurance broker gave false assurances about the soundness of investments offered by financier R. Allen Stanford, now jailed on charges of operating a $7 billion offshore Ponzi scheme.

The lawsuit claims that Willis Group Holdings Ltd. — the company for whom Chicago’s Sears Tower was recently renamed — and its U.S. subsidiary provided letters from 2005 to 2008 that gave investors a misplaced sense of security regarding certificates of deposit offered by Stanford’s bank in the Caribbean island of Antigua.

The letters claimed that insurer Lloyd’s of London provided guarantees for Stanford’s operations and that its finances had been independently audited. In reality, according to the lawsuit, there was no insurance for the CDs and the auditor was a small Antiguan firm controlled by Stanford.

“Willis provided these letters to Stanford, and sometimes directly to investors, knowing the statements were false, or with severe recklessness as to the letters’ veracity,” said the lawsuit filed by Venezuelan citizen Reinaldo Ranni.

A Willis spokesman said the company would not comment on the lawsuit, filed Friday in federal court in Miami. The suit seeks unspecified damages on behalf of potentially 2,100 Stanford investors, with Ranni himself claiming some $2.5 million in losses.

Stanford and three executives of his now defunct Houston-based Stanford Financial Group are accused by federal prosecutors of orchestrating a far-reaching Ponzi scheme by misusing most of the $7 billion they advised clients to invest in certificates of deposit from Stanford International Bank in Antigua. Stanford faces up to 250 years in prison and his assets have been frozen.

A large chunk of those investments from hundreds of Latin Americans flowed through Stanford’s opulent office in a downtown Miami high-rise. Ranni’s lawsuit contends that the assurances given by the Willis letters were a major reason investors felt comfortable with CDs that offered rates well above market averages.

The Willis letters said in part that Stanford was run by “first class business people” and Lloyd’s of London had provided insurance coverage for the bank for up to 12 years. The letter also cited a “stringent” audit from an outside firm. The lawsuit doesn’t indicate whether Lloyd’s of London had provided any insurance of any kind.

“We have found that all our dealings with the bank have been conducted in a professional and satisfactory manner,” the Willis letter says, according to the lawsuit.

“In reality, there was nothing safe, first class or satisfactory, let alone insured, about (Stanford’s) products,” the lawsuit says.

The lawsuit asks a judge to certify the lawsuit as a class-action representing all investors who relied on the Willis letters to make investments with Stanford. More than 2,100 accounts were opened in the Miami office, according to the lawsuit.

A similar lawsuit was filed July 2 in federal court in Dallas by as many as 3,000 Mexican investors who claim they relied on assurances in Willis letters to invest in Stanford CDs. That lawsuit claims damages could exceed $1 billion.

If you believe that you are a victim of this fraud, you may want to consider whether to opt out of any possible class action and to pursue your claim individually. To speak to a securities attorney about your litigation options, please call The White Law Group at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

To learn more about The White Law Group, visit https://whitesecuritieslaw.com.

Tags: Last modified: December 1, 2022