R. Allen Stanford, Stanford International Bank and two other Stanford-related entities are seeking to disqualify Baker Botts from representing receiver Ralph Janvey in a civil suit the U.S. Securities and Exchange Commission filed against Stanford, two of his colleagues and three of his companies. In Securities and Exchange Commission v. Stanford International Bank, et al., the SEC alleges Stanford and his co-defendants engaged in “a massive ongoing fraud” that involved misleading investors about the financial products they sold. In the motion to disqualify filed on June 16, Stanford, Stanford International Bank LTD, Stanford Financial Group Co. and Stanford Group Co. allege that from 1985 to 1987, Baker Botts represented Stanford and his father, James Stanford, in organizing Stanford International Bank (formerly Guardian International Bank) on the island of Montserrat, and the firm was further involved in “setting up the basic business model of the Bank from the beginning.” Stanford and the Stanford companies seek the disqualification due to the alleged conflict of interest. “Clearly, the Plaintiff is adverse to the Defendants who previously employed Baker Botts to organize their businesses and who previously consulted Baker Botts concerning the legality and propriety of selling CDs and reinvesting the money in financial instruments issued by other institutions,” they allege in the brief in support of the motion to disqualify. Michael Cinelli, associate director of public relations at Houston-based Baker Botts, says in a written statement that the firm has no record of ever representing Stanford, Guardian International Bank or Stanford International Bank and “we did not represent anyone in the formation of Stanford International Bank.” Cinelli writes that a former associate, who was supervised by a partner who also left the firm many years ago, did represent a related party from October 1985 through February 1986 on the issue of doing business in the Caribbean. According to Cinelli, the work involved 5.5 hours of time and the fee was $850. “The prior work bears no relationship to the work we are doing for the Receiver. We do not have a conflict of interest,” Cinelli writes. Janvey, a partner in Krage & Janvey in Dallas, could not be reached for immediate comment. The suit is filed in the U.S. District Court for the Northern District of Texas.
-- Brenda Sapino Jeffreys
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