Court Opinion

ID: 2669927
Source: CourtListenerOpinion
Date Created: 2014-04-15 05:06:48.994069+00
Date Added: 2024-06-11T09:13:25.115495
License: Public Domain

Case: 13-30897      Document: 00512594429         Page: 1    Date Filed: 04/14/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                 FILED
                                    No. 13-30897                               April 14, 2014
                                  Summary Calendar                            Lyle W. Cayce
                                                                                   Clerk

REUEL ANDERSON; GARY GREENE; TIMOTHY RICKETTS; ANDERSON
FAMILY COMPANY, L.L.C.; JUNE ANDERSON TESTAMENTARY Q
TRUST; KIM GUILLOT; KAHNE GUILLOT,

                                                        Plaintiffs - Appellants

v.

UNITED STATES OF AMERICA,

                                                         Defendant - Appellee

                   Appeal from the United States District Court
                       for the Middle District of Louisiana
                            USDC No. 3:13-CV-00398

Before REAVLEY, JONES, and PRADO, Circuit Judges.
PER CURIAM:*
       Plaintiffs-Appellants are victims of the Ponzi scheme orchestrated by
Robert Allen Stanford and his investment firm, Stanford International Bank,
Ltd. (collectively, Stanford). They filed suit under the Federal Tort Claims Act
(FTCA), 28 U.S.C. §§ 1346(b), 2671-2680, alleging that the negligence of the
Securities and Exchange Commission (SEC) caused their financial losses. The

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 13-30897    Document: 00512594429     Page: 2   Date Filed: 04/14/2014

                                No. 13-30897

district court held that Plaintiffs-Appellants’ claims fell within the
discretionary function exception to the FTCA and dismissed the case. We
AFFIRM.
      Plaintiffs-Appellants focus on the conduct of Spencer Barasch, the SEC’s
regional enforcement director. They describe two instances in which Barasch
failed to forward reports detailing Stanford’s highly suspicious investment
activities. In 1997, SEC examiners concluded that Stanford was not selling
legitimate securities. Barasch reviewed this examination and decided to refer
it to the National Association of Securities Dealers. The matter, however, was
never referred. In 2002, the SEC conducted another examination of Stanford,
again uncovering numerous red flags. Around this time, an accountant whose
75 year-old mother was a Stanford investor also sent the SEC a letter raising
similar concerns.    SEC examiners submitted their findings, including the
accountant’s letter, to Barasch, who indicated that he would refer the letter to
the Texas State Securities Board. Barasch, however, failed to do so.
      Plaintiffs-Appellants argue that the SEC, through Barasch, adopted a
policy of forwarding the reports of Stanford’s activities. Relying on Berkovitz
v. United States, 486 U.S. 531 (1986), they further contend that the SEC’s
negligence in failing to carry out this policy is outside the scope of the
discretionary function exception.     The analogy to Berkovitz, however, is
unavailing. In that case, the adopted policy left “no room for implementing
officials to exercise independent policy judgment.” Berkovitz, 486 U.S. at 547.
Here, as the district court correctly held, Plaintiffs-Appellants have not
identified any mandatory obligations violated by SEC employees in the
performance of their discretionary duties, nor alleged any facts sufficient to
overcome the strong presumption that the SEC’s decision not to pursue
Stanford, however regrettable, was not grounded in policy considerations.

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Case: 13-30897   Document: 00512594429   Page: 3   Date Filed: 04/14/2014

                          No. 13-30897

 AFFIRMED.

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