Funds News

UPDATE 1-SEC opposition to Stanford fees unjustified-filing

(Adds response from SEC)

HOUSTON, June 22 (Reuters) - The U.S. Securities and Exchange Commission sought to reduce fees for the receiver appointed to recover assets for clients of accused swindler Allen Stanford only after it was discovered that the estate was worth less than expected, lawyers for the receiver said.

Ralph Janvey, the receiver in the Stanford case, has asked a court to approve $20 million of fees and expenses for firms that worked for him since the civil fraud case was filed in February.

But a number of parties -- including the SEC, the examiner in the case and Allen Stanford -- oppose the fee request, arguing in court filings that it is excessive.

The government only sought deep discounts after the fact, lawyers for the receiver said in documents filed late on Friday in federal court in Dallas.

“None of the professionals was retained with the understanding that they would be subjected to deep discounts if the recoverable estate assets were less than the SEC expected,” the court filing said.

Initially, the SEC apparently expected to recover as much as $1 billion, but only about $350 million of assets have been located, the receiver’s filing said.

A spokesman for the SEC declined to comment on the filing.

Stanford and others face civil and criminal charges over an alleged scheme related to certificates of deposits issued by his bank in Antigua.

The receiver’s expenses and fees are warranted because the task of unwinding Stanford’s complex web of more than 130 business entities has been a monumental one, Janvey’s lawyers said in the court papers.

“The professionals tasked with helping to halt the scheme, recover assets and otherwise sort out the financial mess should not be penalized,” Janvey’s lawyers said. (Reporting by Anna Driver; Editing by Steve Orlofsky and Maureen Bavdek)