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Zacarias v. Stanford Int'l Bank, Ltd.

United States Court of Appeals for the Fifth Circuit

December 19, 2019, Filed

No. 17-11073 CONSOLIDATED WITH 17-11114 CONSOLIDATED WITH 17-11122 CONSOLIDATED WITH 17-11127 CONSOLIDATED WITH 17-11128 CONSOLIDATED WITH 17-11129

Opinion

 [*888]  PETITION FOR REHEARING

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Treating the Petition for Rehearing En Banc as a petition for panel rehearing, the petition is GRANTED. We withdraw the opinions of July 22, 2019,1 and substitute the following opinions:

 [*889]  I.

The Securities and Exchange Commission filed a complaint [**7]  in the Northern District of Texas against Robert Allen Stanford, the Stanford International Bank, and other Stanford entities, alleging "a massive, ongoing fraud." Invoking the court's long-held statutory authority, the Commission requested that the district court take custody of the troubled Stanford entities and delegate control to an appointed officer of the court. The court did so, appointing Ralph Janvey as receiver to "collect" and "marshal" assets owed to the Stanford entities, and to distribute these funds to their defrauded investors to honor commitments to the extent the receiver's efforts recouped monies from the Ponzi-scheme players.

The receiver has pursued persons and entities allegedly complicit in Stanford's Ponzi scheme. Through settlements with these third parties, the receiver retrieved investment losses, which it then distributed pro rata to investors through a court-supervised distribution process. Four years into this ongoing process, the receiver sued two insurance brokers, not upon contracts of insurance, but for participating in the Ponzi scheme. As with the receiver's other suits, monies it recovered from this suit would be distributed by the receiver pro rata [**8]  to investor claimants. After years of litigation, the two companies, negotiating for complete peace, agreed to settle conditioned on bar orders enjoining further Ponzi-scheme suits filed against them. The district court entered the bar orders and approved the settlements. Certain objectors bring this appeal challenging the district court's jurisdiction and discretion to enter the bar orders. We affirm.

The story is well known. Under the operation of Robert Allen Stanford, the Antigua-based Stanford International Bank issued certificates of deposit (SIB CDs) and marketed them throughout the United States and Latin America.2 Stanford's financial advisors promoted SIB CDs by blurring the line between the Antiguan bank and Stanford's United States-based financial advisors, creating the impression that SIB CDs were better protected than similar investments backed by the Federal Deposit Insurance Corporation. Stanford trained its brokers to assure potential investors that the Bank's investments were highly liquid and achieved consistent double-digit annual returns, all under the protection of extensive insurance coverage.

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945 F.3d 883 *; 2019 U.S. App. LEXIS 37872 **; 2019 WL 6907376

ANTONIO JUBIS ZACARIAS; ROBERTO BARBAR, Plaintiffs - Appellants v. STANFORD INTERNATIONAL BANK, LIMITED, Defendant;BARRY L. RUPERT; CAROL RUPERT; MICHAEL RISHMAGUE; LIONEL ALESSIO; DAN AULI PANOS, et al, Movants - Appellants v. OFFICIAL STANFORD INVESTORS' COMMITTEE; MANUEL CANABAL; WILLIS, LIMITED; WILLIS OF COLORADO, INCORPORATED, Interested Parties - Appellees; WILLIS GROUP HOLDINGS LIMITED; WILLIS NORTH AMERICA, INCORPORATED; AMY S. BARANOUCKY; BOWEN MICLETTE; BRITT, INCORPORATED; RALPH S. JANVEY; SAMUEL TROICE, Appellees v. EDNA ABLE, Interested Party — Appellant;THE OFFICIAL STANFORD INVESTORS' COMMITTEE; SAMUEL TROICE, on their own behalf and on behalf of a class of all others similarly situated; MANUEL CANABAL, on their own behalf and on behalf of a class of all others similarly situated, Plaintiffs - Appellees v. CARLOS TISMINESKY; ROBERTO BARBAR; ANA LORENA NUILA DE GADALA-MARIA, Plaintiffs - Appellants v. WILLIS OF COLORADO, INCORPORATED; WILLIS LIMITED; WILLIS GROUP HOLDINGS LIMITED; WILLIS NORTH AMERICA, INCORPORATED; AMY S. BARANOUCKY; BOWEN, MICLETTE; BRITT, INCORPORATED, Defendants - Appellees v. BARRY L. RUPERT; CAROL RUPERT; MICHAEL RISHMAGUE; LIONEL ALESSIO; DAN AULI PANOS, EDNA ABLE; et al, Appellants v. RALPH S. JANVEY, in his Capacity as Court-Appointed Receiver for Stanford Receivership Estate, Appellee;EDNA ABLE; ROBERT C. AHDERS; RODRIGO RIVERA ALCAYAGA; DAVID ARNTSEN; CARLIE ARNTSEN; ET AL, Plaintiffs - Appellants v. WILLIS OF COLORADO, INCORPORATED; WGH HOLDINGS, LTD.; WILLIS LTD., Defendants - Appellees;ANTONIO JUBIS ZACARIAS, Individual; ANA VIRGINIA GONZALEZ DE JUBIS, Individual; GLADIS JUBIS DE ACUNA, Individual; ERIC ACUNA JUBIS, Individual; TULIO CAPRILES, Individual; JORGE CASAUS HERRERO, Individual; MARTHA BLANCHET, Individual; LUIS ZABALA, Individual; EMMA LOPEZ, Individual; ELBA DE LA TORRE, Individual, Plaintiffs - Appellants v. WILLIS LIMITED; WILLIS OF COLORADO, INCORPORATED, Defendants — Appellees;ANA LORENA NUILA DE GADALA-MARIA, Individual; JOSE NUILA, Individual; JOSE NUILA FUENTES, Individual; GLADYS BONILLA DE NUILA, Individual; GLADYS ELENA NUILA DE PONCE, Individual, et al Plaintiffs - Appellants v. WILLIS LIMITED, a United Kingdom Company; WILLIS OF COLORADO, INCORPORATED, a Colorado Corporation Defendants - Appellees;CARLOS TISMINESKY, Individual; RACHEL TISMINESKY, Individual; FELIPE BRONSTEIN, Individual; ETHEL TISMINESKY DE BRONSTEIN, Individual; GUY GERBY, Individual; VICENTE JUARISTI SUAREZ, Individual; AMPARO MATEO LONGARELA, Individual; SALVADOR GAVILAN, Individual; LARRY FRANK, Individual; MERCEDES BITTAN, Individual; OMAIRA BERMUDEZ, Individual, Plaintiffs - Appellants v. WILLIS LIMITED; WILLIS OF COLORADO, INCORPORATED, Defendants — Appellees

Subsequent History: Petition for certiorari filed at, 06/19/2020

Petition for certiorari filed at, 06/19/2020

Prior History:  [**1] Appeals from the United States District Court for the Northern District of Texas.

Zacarias v. Stanford Int'l Bank, Ltd., 931 F.3d 382, 2019 U.S. App. LEXIS 21764 (5th Cir. Tex., July 22, 2019)

CORE TERMS

receivership, investors, entities, settlement, objectors, brokers, enjoining, appointed, claimants, fraudulent, coverage, defrauded, rata, third-party, deposits, custody, troubled, dollars, holders, negotiated, channel, notice

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, De Novo Review, Preliminary Considerations, Jurisdiction, Subject Matter Jurisdiction, Settlements, Remedies, Receiverships, Securities Law, Civil Liability Considerations, Equitable Relief, Receiverships, Receivers, Receivers, Powers of Receivers, Federal & State Interrelationships, Anti-Injunction Act, Jurisdiction Over Receivers