U.S. Accuses Texas Financial Firm of ‘Massive’ Fraud

[TexasLawyer]

Source: NYT


By PHILLIP L. ZWEIG and JULIE CRESWELL

Published: February 17, 2009

Stopping what it called a “massive ongoing fraud,” the Securities and Exchange Commission on Tuesday accused Robert Allen Stanford, the chief of the Stanford Financial Group, of fraud in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.

Press Release from the S.E.C.
Litigation Release from the S.E.C.In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured CDs.

The CDs were sold by Stanford International Bank through the firm’s registered broker-dealer and investment adviser, which are in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the S.E.C. suit. Stanford Financial asserts that it advises about $50 billion in assets.



Read more: http://www.nytimes.com/2009/02/18/business/18stanford.html?_r=2&hp

---

Good friend of W.

[aquart]

1. Aww, the SEC got off its ass.

If Stanford was a pal of George, is it possible George's money was with him? PLEASE SAY YES.

[TexasLawyer]

2. Wouldn't that be poetic justice?

Not a full measure of the justice that W deserves, mind you, but it would be a lovely and symbolic start.

Keeping my fingers crossed.

[aquart]

7. Can't wait to see the client list.

[goforit]

12. Got off their ass??? Not until all these thugs are behind bars permanently!

[FarCenter]

3. Have the special forces landed in Antigua yet?

Time for the DoD to do something useful and invade Carribean tax havens.

[SpiralHawk]

16. "We BFEEers are into Swiss Bank accounts - smirk" - xCommander AWOL (R)

[kentauros]

19. Personally, I think we should just hire the best of the hackers

and let them transfer all that money back to Stanford's US-based accounts so they can be seized :D

That way, no loss of life or limb, and the bank loses credibility with the rest of their members. Let's see a run on the banks of Antigua!

[serrano2008]

4. Stanford is friends with everybody in Washington but their buying influence is obvious

Year Total Money given To Dems To Repubs
2008 $3,171,897 $1,123,119 $1,662,023
2006 $1,489,076 $377,977 $728,348
2004 $1,855,466 $600,434 $1,049,477
2002 $2,584,610 $335,696 $269,230
2000 $3,238,289 $242,985 $1,256,271


http://www.campaignmoney.com/political/contributions/texas_houston_77056.asp?pg=36&cycle=04&mode=s

[digidigido]

11. your math makes no sense

[serrano2008]

13. Which part doesn't make sense?

Oh...you mean where I didn't include the individual amounts to other political parties besides Dems and Republicans.

I just copied and pasted directly from that site.

[izquierdista]

5. I guess his Super Ranger badge expired

At least George will have lots of friends to visit with when his cell is finally readied.

[TexasLawyer]

6. May be much bigger fraud than $8 billion

The SEC is just concerned at this point with the CDs. Here's an interesting thought posed on Karl Denninger's excellent website:

Stanford's web site claims $50 billion under management. How much of that money is there, if $8 billion in "CDs" were sold that regulators are claiming to be involved in a "massive, ongoing fraud"?

http://market-ticker.denninger.net/

[aquart]

8. I know Venezuela is going to feel the pain.

The blogs I read over the weekend said Stanford got a lot of investment from there. All I want is for the Exxon execs to be on his client list. And the entire Bush family. I'm a simple, vengeful soul.

[Robbien]

18. The US/Canadian/UK accounts are offshore tax dodgers

so it is a waste of sympathy to feel sorry for them. Schadenfreude is more likely.

The Latin American accounts are the ones for which I feel sympathy.

[Frustratedlady]

20. Would you e/m me if that happens, as I want to start popping corn.

Believe me, there are many who are wishing the same as you mentioned. Vengeful? You bet!

[aquart]

9. They claim "70,000 clients in 140 countries."

Ouch.

<http://www.stanfordinternationalbank.com/>

The flex and fixed CDs require a minimum $10,000 initial deposit except for the US Accredited Investor Program which requires an initial $50,000.

Index Linked CDs require a minimum $25,000.

Performance Account requires a minimum initial deposit of $10,000.

Premium Account requires a minimum initial deposit of $50,000.

[TexasLawyer]

22. ouch indeed

[mbperrin]

26. GOTTA be bigger than Madoff! As a native Texan, I want

to assure everyone that we take a back seat to no one, certainly not a NEW YAWKER, when it comes to big time thievery and fraud!

Get those totals up there!!!!


(I'M not even sure if I'm kidding or not!)

[brooklynite]

10. Bloomberg: Stanford International Bank Said to Bar Withdrawals Amid Probe

Feb. 17 (Bloomberg) -- Stanford International Bank Ltd., the Antigua-based affiliate of billionaire R. Allen Stanford’s U.S. investment firm, placed a 60-day moratorium on early redemptions of its certificates of deposit, people familiar with the matter said.

Stanford Group Co. financial advisers have told three clients that they can’t redeem CDs sold by the firm prior to their maturity date, according to the customers, who asked that their names not be used. The bank in the past let customers pay a three-month interest penalty to get their money back before the contractual maturity of the certificates, the people said.

“Bank depositors may withdraw funds in accordance with the terms of their accounts,” Stanford spokesman Brian Bertsch said.

The bank is within its contractual rights to stop early redemptions, the people said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeHvNZJLOWf0&refer=home

nothing to worry about, I'm sure...

[pjt7]

15. HOUSTON we

have a problem.

This Country is rotten to the core~

[radfringe]

14. SEC charges Stanford in alleged $8 bln scheme

Source: Market Watch

SEC charges Stanford in alleged $8 bln scheme
By Alistair Barr, MarketWatch
http://www.marketwatch.com/news/story/sec-charges-stanford-alleged-8/story.aspx?guid=%7B7A11D196-A189-4982-BA46-4F4F1AEF9597%7D&dist=msr_1
Feb. 17, 2009

The Securities and Exchange Commission said Tuesday it charged Robert Allen Stanford and three of his companies with defrauding investors in an alleged $8 billion certificates of deposit scheme.

Stanford's Antigua-based bank, Stanford International Bank, sold roughly $8 billion of certificates of deposit to investors through a network of financial advisers by promising "improbable and unsubstantiated" high interest rates, the SEC said in a statement.

The rates were "supposedly" earned through the bank's investment strategy, which "purportedly" allowed the bank to achieve double-digit returns on its investments for the past 15 years, the regulator added.

The SEC also charged Stanford International Bank's Chief Financial Officer James Davis and Stanford Financial Group's Chief Investment Officer Laura Pendergest-Holt.

Read more: http://www.marketwatch.com/news/story/sec-charges-stanford-alleged-8/story.aspx?guid=%7B7A11D196-A189-4982-BA46-4F4F1AEF9597%7D&dist=msr_1

[MineralMan]

17. Ah...the next Ponzi scheme emerges, but only with

$8B in supposed assets. I do so hope that the Bushes have money plugged into this. Lots and lots of money. Lots of undeclared deposits, please, for the Bushes. Yes, indeed.

I suspect that this is just the first of many such offshore scams that will soon be revealed. Wouldn't it just be poetic justice if the rich lost their money through these scams? I have an old Volvo I could sell one of them.

[sledgehammer]

21. Some info on Stanford

Stanford rose to prominence in recent years with his support of Twenty20 cricket. This format is wildly popular in cricketing countries, especially in the Caribbean. He built his own private cricket ground where he held an annual tournament that revived interest in the sport in the Caribbean.

He organized a one-off match last year between English and West Indian players, with the winning team taking home $20 million! It's possibly the largest prize for a one-off match in any sport.

Stanford is a very showy guy. Here's a picture of him carrying the $20 million in cash to Lord's cricket ground in London:



And here's a pic of him frolicking with the players' wives during the $20 million match:



Such opulence and recklessness never have a good ending. He really went overboard with everything.

Definitely a little disappointing for this cricket fan, and surely will be devastating for the Caribbean. But it's time for these criminals to pay. No room for them in sport, or any other theater.

Thankfully someone finally woke up the SEC!

[sofa king]

23. This one could be really interesting, kids.

DUer malaise and others were onto this a week ago in this thread, and it looks like those folks have been barking up this tree for a long time.

I'm going to be particularly interested in Stanford's personal relationship with George Bush and Dick Cheney, the Financial Group's interests and activities in Venezuela, particularly in the months leading up to the April, 2002 attempted coup against Hugo Chavez. Look for the CIA to try to make this one go away.

[rainbow4321]

24. And exactly who has gotten/benefited from his $1.5 million worth of donations?

Hmmm...I'm guessing there is alot of pols looking over their books right about now.


http://downwithtyranny.blogspot.com/2009/02/crooked-billionaire-pays-offs-crooked.html

[SOS]

25. Open Secrets shows that Stanford greased a lot of politicians

From Cornyn to Schumer.

Rotten to the core.

[depakid]

27. U.S. Accuses Texas Financial Firm of $8 Billion Fraud

Source: NY Times


One of Stanford Financial Group’s buildings in Houston last week.
-------------

The Securities and Exchange Commission accused Robert Allen Stanford, the chief of the Stanford Financial Group, on Tuesday of conducting “a massive ongoing fraud” in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.

In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured C.D.’s.

The C.D.’s were sold by Stanford International Bank through the firm’s registered broker-dealer and investment adviser, which are in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the S.E.C. suit. Stanford Financial asserts that it advises about $50 billion in assets.

Shortly after 10 a.m. Central time, about 40 police officers and other law enforcement officials simultaneously entered Stanford Group’s two office buildings in Houston. Many of the law enforcement personnel carried large black briefcases. Stanford group’s headquarters are in two offices in Houston, one within a tower of the Houston Galleria shopping mall, and the other across the street.

Read more: http://www.nytimes.com/2009/02/18/business/18stanford.html?hp

---

and in requiem:

After Lobbying From Stanford, Senate Killed Bill To Combat Financial Fraud

A great catch on Stanford by Lindsay Renick Mayer of the Center for Responsive Politics.

To summarize: The cycle during which the Stanford Financial Group gave the most in political contributions was 2001-2002. That may have been because, at that time, Congress was debating the Financial Services Antifraud Network Act, which, according to CRP, would have "created a computer network linking the databases of state and federal banking, securities and insurance regulators to curb financial fraud."

That bill ended up passing the House, but not the Senate. And according to lobbying reports, says Renick Mayer, Stanford Financial Group lobbied on the bill. (It's not hard to guess their position.)

During that same cycle, Renick Mayer continues, the Democratic Senatorial Campaign Committee took in more than $800,000 from the firm. At the time, the DSCC was chaired by Florida Democratic senator Bill Nelson. And Nelson is the current member of Congress who has received more campaign cash from Stanford and its employees than any other, raking in $45,900.

http://tpmmuckraker.talkingpointsmemo.com/2009/02/after_lobbying_from_stanford_senate_killed_bill_to.php

[frylock]

28. Democratic Senatorial Campaign Committee took in more than $800,000 from the firm

[truthisfreedom]

29. Great.

[depakid]

30. It gets better (greasing palms on both sides of the aisle)

Stanford-Tied Group Funded Numerous Antiguan Trips For Lawmakers

The number of lawmakers who may have taken trips to Antigua and Barbuda backed by alleged billion-dollar fraudster Allen Stanford just keeps getting bigger. According to congressional travel disclosure reports posted on the Legistorm website, between 2003 and 2005 several members of Congress or their aides took trips to the island nation that were financed by the Inter-American Economic Council.

Among the lawmakers current or former: Bob Ney (R-OH), Pete Sessions (R-TX), Max Sandlin (D-TX), Donald Payne (D-NJ), John Sweeney (R-NY), Phil Crane (R-IL), and Gregory Meeks (D-NY). Aides to Ney, Sessions, Sandlin, and Tom DeLay (R-TX) also soaked up the Antiguan sun.

Stanford is closely tied to the IAEC. In 2006, he received the organization's "Excellence in Leadership" Award. A press release put out by the group declared that Stanford "has strongly supported the work that the IAEC is doing in Latin America and the Caribbean."

http://tpmmuckraker.talkingpointsmemo.com/2009/02/stanford-tied_group_funded_numerous_antiguan_trip.php