Allegations that Louisiana financial regulators' failure to perform their duties contributed to the massive losses suffered by hundreds of Louisiana investors in the Stanford Trust Co. debacle can move forward as a class action, a state appeals court in Baton Rouge has ruled.

Phil Preis, the lead attorney for those residents, said Monday the damages sustained by those investors are some $400 million, which includes interest.

Roughly seven dozen mostly south Louisiana residents sued the state Office of Financial Institutions in 2009, essentially claiming OFI turned a blind eye to Stanford owner Robert Allen Stanford's multibillion-dollar fraud scheme.

OFI has stated in court documents that it doesn't guarantee that investors in OFI-regulated companies, such as Stanford Trust, won't lose money to fraudulent conduct.

The lawsuit also alleges Pennsylvania-based SEI Investments Co. performed the accounting and reporting of the IRA investments and "actively and materially aided" Stanford Trust and Stanford Group Co. to "perpetuate the massive Ponzi scheme now alleged by the SEC." SEI denies those allegations.

Stanford's firm operated Stanford Group Co. in Baton Rouge.

In 2012, state District Judge Mike Caldwell, of Baton Rouge, certified the suit against OFI and SEI as a class action on behalf of some 1,100 Louisiana residents.

Preis said Monday the claims against SEI were later removed to federal court and are currently being handled in Dallas. If the case against SEI goes to trial, he added, the trial would be held in federal district court in Baton Rouge.

Court allows Stanford Ponzi scheme suits WASHINGTON (AP) — The Supreme Court says class-action lawsuits from investors who lost billions in former Texas tycoon R. Allen Stanford’s mas…

Preis said the negligence claims against OFI remain in state court in Baton Rouge.

The best chance for the Louisiana residents to obtain a major financial recovery is in the federal case against SEI, he added.

"We would like to resolve it with the state of Louisiana," Preis said of the claims against OFI. "We don't view them as the primary culprit. They're not our primary focus."

The state Attorney General's Office represents OFI in the case. Ruth Wisher, a spokeswoman for that office, said Monday the office does not comment on pending litigation.

If a settlement isn't reached with SEI, Preis said, the federal court trial could possibly begin in early 2019.

The state 1st Circuit Court of Appeal last week affirmed Caldwell's decision to certify the claims against OFI by the 86 named plaintiffs as a class action on behalf of the larger group of some 1,100 residents.

The class consists of persons who purchased Stanford International Bank CDs, or certificates of deposit, in Louisiana between Jan. 1, 2007, and Feb. 13, 2009, as well as persons who renewed any SIB CD in the state between those dates. The class also includes persons for whom Stanford Trust purchased SIB CDs in Louisiana during that time frame.

"Although the evidence shows that there were differences in the manner in which the various plaintiffs came to invest in the SIB CDs, we fail to see how these differences change the fact common to all the plaintiffs — that they invested in the CDs under a false understanding of the value and safety of the investment," Circuit Judge John Michael Guidry wrote Wednesday for a three-judge panel of the 1st Circuit in affirming Caldwell's class-action certification.

"And while the OFI did not directly make any representations to the plaintiffs as to the value or risk of the SIB CDs, the question that remains and that is yet to be determined is whether any communication by the OFI of its concerns regarding the risk and value of the CDs … would have come to the knowledge of the plaintiffs or otherwise impacted the representations made to the plaintiffs," he added for the panel, which included Chief 1st Circuit Judge Vanessa G. Whipple and Circuit Judge Page McClendon.

Guidry said the answer to the question of whether OFI had a duty to disclose the riskiness of the CDs or to prohibit the sale of the CDs is "equally common to all the proposed plaintiffs."

OFI had argued to the appellate court that there is a lack of commonality as to the representations made to each plaintiff to cause him or her to either invest directly in the SIB CDs held by Stanford Trust or to place their IRA accounts with Stanford Trust, whereby the IRA funds were converted to SIB CDs.

Robert Allen Stanford, of Houston, is serving a 110-year prison term for masterminding a fraud scheme that bilked some 25,000 investors and caused $7 billion in client losses globally. A federal appeals court in New Orleans let his 2012 conviction and sentence stand in 2015.

Investors were told by Stanford's financial advisers that their money was safely held in CDs at Stanford International Bank in the Caribbean island of Antigua. But the money for the CDs funded his lavish habits.