Stanford Group Co.’s court-appointed receiver fired about 1,000 workers

Stanford Receiver Fires 1,000 of Firm’s Workers
85 percent of the firm’s employees, to help conserve the value of the estate for investors.

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All of the terminations were effective today, according to a statement posted on the Web site of the receiver, Ralph Janvey. The workers’ salaries and benefits were discontinued immediately, and they won’t receive any severance pay or bonuses, according to the statement. “A small number” of employees in Houston will be retained to assist in winding down operations and settling the receivership estate.

“After a review of the circumstances, the receiver concluded that continuing employment for these employees is not in the interest of conserving and preserving the value of the estate because there are insufficient resources to continue to compensate all present employees,” according to the statement.

The U.S. Securities and Exchange Commission sued Texas financier R. Allen Stanford, two associates and three affiliated companies on Feb. 17, accusing them of orchestrating an $8 billion fraud involving the sale of high-yield certificates of deposit through Antigua-based Stanford International Bank.

Last month, U.S. District Judge David Godbey in Dallas froze all of Stanford’s corporate and personal assets and appointed Janvey, a Dallas lawyer, as receiver for the companies. Yesterday, Godbey ordered the release of accounts valued at less than $250,000 that aren’t linked to suspected fraud.

Decisions about Stanford’s employees outside the U.S. will be announced in the next few weeks, Janvey said in the statement. Janvey said most of Stanford’s businesses and operations will be wound down.

The case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas).