Reuel Anderson, et al v. USA

Filing

UNPUBLISHED OPINION FILED. [13-30897 Affirmed ] Judge: TMR , Judge: EHJ , Judge: ECP Mandate pull date is 06/05/2014 [13-30897]

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
Summary Calendar

April 14, 2014
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
*

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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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AFFIRMED.

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Date Filed: 04/14/2014