“You can’t sue the government simply for making mistakes,” attorney Edward J. Gonzales III said; “You can sue the government for negligence and deliberate misconduct,” Gonzales added.
It is clear that the OIG report found violations of federal laws and regulations by Barasch. He violated those rules and duties to the investing public in general and to these plaintiffs in particular. In addition, Barasch may have committed multiple criminal violations of 18 U.S.C. § 1519 as well as other violations that facilitated Stanford’s crimes and obstructed federal investigations. Had Barasch not done as he did, none of the plaintiffs would or even could have invested with SIBL – it’s doors would have been shut – and the damages suffered by the plaintiffs would have been completely avoided. Like the federal employees in Limone v United States, 497 F. Supp. 2d 143 (D. Mass 2007); 579 F 3d 79 (2d 2009), who engaged in subordination of perjury and obstruction of justice in the course of their duties as federal agents, Spencer Barasch has by his conduct rendered the United States liable to the plaintiffs.
Alternatively, the conduct of Spencer Barasch referred to herein was negligent.
Additionally, the failure of Barasch’s superiors to properly review and supervise his conduct – simply put, to find out that he was not making outside referrals as he said he was – was negligence, not an exercise of law enforcement discretion or policy discretion. They did not “decide to allow” this conduct. Rather, they should have discovered it and negligently failed to do so. Had they identified Barasch’s misconduct, there is no doubt that the SEC and other agencies would then have acted differently and effectively against Stanford.
The plaintiffs purchased their investments, which have been determined to be without value by the Stanford Receiver. The government is therefore liable to the plaintiffs in the amounts they purchased. As further damages for loss of their opportunities to earn on their investments, the plaintiffs also claim as damages the interest that investments in legitimate CD accounts would have earned since the date the receivership was filed, until paid.
Plaintiffs bring this case on behalf of themselves and on behalf of all persons or entities, who have suffered losses of investments with Stanford International Bank, and file administrative response, excluding any class member who timely elects to be excluded from the Class (“the Class”). Plaintiffs allege that all such class members were damaged or sustained investment losses as a proximate cause and result of the negligence and deliberate misconduct by Spencer Barasch and the negligent supervision of Barasch by the SEC.
As of the present date, the United States of America has the administrative ability to identify all members of the Class, as it has received their claims.
Membership in the Class is so numerous as to make it impractical to bring all Class Members before the Court. The exact number of Class Members is unknown, but can be determined from the United States of America’s claim records. Plaintiffs reasonably estimate and believe that there are approximately two thousand (2,000) in the Class. Although Plaintiffs do not presently know the names of all Class Members, their identities and addresses can be readily ascertained from the United States of America’s records.
Plaintiffs and all Class Members have suffered similar damages as a result of the negligence and intentional misconduct of the United States of America’s employee, Spencer Barasch, as well as the negligent supervision of its employees of the U.S. Government.