Stanford makes Businessweek - the S is about to hit

[malaise]

this fan.

http://www.businessweek.com/magazine/content/09_08/b4120022131798.htm?chan=top+news_top+news+index+-+temp_top+story
<snip>
Financier Robert Allen Stanford makes investors an enticing offer: He sells supposedly super-safe certificates of deposit with interest rates more than twice the market average. His firm says it generates those impressive returns by investing the CD money largely in corporate stocks, real estate, hedge funds, and precious metals.

State and federal regulators are now taking a hard look at Stanford's operation and CDs, whose underlying investments look shaky. Over the past 12 months those categories lost huge value, even as Stanford Financial Group continued to pay out above-average returns and boosted assets by 30% to more than $50 billion.

BusinessWeek has learned that the Securities & Exchange Commission; the Financial Industry Regulatory Authority, a major private-sector oversight body; and the Florida Office of Financial Regulation are all investigating Stanford Financial.

[PM Martin]

1. Really?

CD's that post twice the return of all of CD's?
Sounds like another ponzi scheme.
Ponzi schemes are nothing new. They are coming to light as we the masses are taking a microscope to the doings of the financial industry.
If any wrongdoing has been done, we are going to find out about it.

[malaise]

3. CNBC ought to be more careful with their favorites

This is about to hit the fan and several Caribbean folks are going to take a hit.

[PM Martin]

4. CNBC?

[malaise]

5. From the first link

The firm's stature has grown in recent years. Stanford Financial's analysts regularly appear as guests on CNBC and other business television outlets. The firm has also become a fixture in South Florida, where it's the major corporate sponsor of the Miami Heat, the professional basketball team.

[malaise]

23. Even better

http://www.cnbc.com/id/15840232?video=739904675

[malaise]

2. Whistleblower Alleges $8 Billion Fraud At Sir Allen Stanford's Offshore Bank

http://www.businessinsider.com/whistleblower-alleges-8-billion-fraud-at-sir-allen-stanfords-offshore-bank-2009-2
<snip>
This will be interesting to watch: A whistleblower named Alex Dalmady claims that Stanford International Bank, a large offshore operation run by Texas billionaire Sir Allen Stanford, is an $8 billion fraud, with suspiciously steady year-on-year returns, a la Bernie Madoff. We've embedded the full document below, but here's Felix Salmon's boildown:

As you can see, Stanford manages to report extremely consistent returns every year, and it even managed to make a 6% profit on its portfolio in 2008. Which is extremely impressive, given what happened to just about every asset class last year. And which is even more impressive given that Stanford International Bank is a bank which doesn't make loans.

SIB, it turns out, is a very peculiar fish indeed: it offers extremely high interest rates on its deposits -- on the order of 7.5% for a one-year CD. It then takes that money and, rather than lending it out at a higher rate still, invests it in stocks and hedge funds and commodities and the like.

If that sounds dangerous to you, ask yourself whether you'd be remotely reassured by the "Depositor Security" section of Stanford's website:

[Ichingcarpenter]

6. A big supporter of Tom Delay's and Bob Ney's defense group

Stanford gives to both Democrats and Republicans. Among its top beneficiaries have been former Senator Robert Torricelli, a New Jersey Democrat who left office in 2003 amid ethics allegations, and Republican Representatives Tom DeLay of Texas, who is resigning from Congress next month after having been indicted in a Texas election-fundraising case, and Bob Ney of Ohio, who's under investigation in the scandal involving lobbyist Jack Abramoff. Stanford Financial or its employees have contributed to the legal defense funds of the three lawmakers.

Company Jets
DeLay's committees paid for flights on Stanford's jets at least 16 times since 2003, including on Oct. 20, the day the former House majority leader was booked in a Houston courthouse on money-laundering charges. Shannon Flaherty, a spokeswoman for DeLay, didn't respond to a request for comment.
Members of the House Caribbean Caucus take annual trips to the region on Stanford's jets. Lawmakers are required to reimburse companies at a first-class commercial rate, which is often a fraction of the actual cost.

``Our relationship with political leaders is and always will be proper, bipartisan and fully disclosed,'' Stanford Financial said in a written response to questions.



Stanford, 56, traces his company's roots to his grandfather's insurance company, founded in the central Texas town of Mexia in the 1930s. U.S. court records show that his core business -- the offshore bank -- was formed in 1985 on the Caribbean island of Montserrat and moved to Antigua in 1990.
That's where he ran into problems with U.S. investigators. In 1999, Stanford Financial tried to take over Antiguan International Business Corp., which regulated offshore companies on the island, said Jonathan Winer, who was then a deputy assistant secretary of State. State Department cables sent from the U.S. Embassy described a ``power grab'' and criticized the company's hiring of U.S. consultants to revise Antigua's offshore-banking rules.

``The high-powered legal and investigative hired guns from the U.S. are likely being tasked with cleansing the files to make sure there is nothing in them that could damage or implicate the American offshore banker,'' one cable read.

Warning Lifted

The U.S. advised financial institutions to be suspicious of transactions with Antigua banks, a warning that was lifted in August 2001 after Antigua took steps to fight money laundering. The warning didn't specifically mention Stanford Financial's bank.

Stanford Financial says Allen Stanford ``was asked to serve in an advisory capacity to the government of Antigua and Barbuda'' and hired a ``top-notch team of former U.S. legal and regulatory professionals'' that helped that country adopt anti- money-laundering rules. ( Notice the Bush years the heat is off)


http://www.bloomberg.com/apps/news?pid=10000103&sid=a.0EEBl4oTSA&refer=us

[malaise]

8. Stanford University sued him recently

I'll dig that up.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5024154

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x56548

[Ichingcarpenter]

12. Off shore banks, money laundering, Tom Delay and Bob Ney

tell me they are not clean. Also located in Houston.

They also lied that they are related to the Stanfords of Stanford University

[malaise]

10. From 2008

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2860182

[malaise]

Stanford University sues Stanford

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4687337

[malaise]

21. I'm watching with much interest

believe me on that.

[Robbien]

7. If this is not a mirror image of Madoff

what else can it be? This thing screams ponzi.

I read the sole 72 year old accountant running the audits on Stanford just died. Uh oh.

[malaise]

9. Are you serious

Please give me a link

[Robbien]

13. Sure

http://caracasgringo.wordpress.com/2009/02/09/stanford-international-bank-antiguas-bernie-madoff/

The item about his death is in the comments to the blog entry so it may or may not be a fact.

[malaise]

16. I'll check that tomorrow

The cricket comment is also very interesting

[Ichingcarpenter]

20. Well worth the read..... How big does anyone think this will be?$$$$

When it goes down because I think a lot of it is hidden.

[malaise]

22. Much bigger than many people think

Another link.

http://www.portfolio.com/views/blogs/market-movers/2009/02/10/whats-going-on-at-stanford-international-bank

[malaise]

24. Enjoy

http://bernard-madoff-scam.blogspot.com/


http://www.bloomberg.com/apps/news?pid=20601087&sid=aUtjE4_bm4oM&refer=home

<snip>
By Alison Fitzgerald

Feb. 12 (Bloomberg) -- Stanford Group Co., a Houston-based investment firm led by billionaire R. Allen Stanford, is under investigation by U.S. securities regulators over sales of certificates of deposit in its affiliated offshore bank and the consistent, above-average returns those investments pay.

Investigators from the Financial Industry Regulatory Authority visited six Stanford Group offices last month, downloaded information from computer hard drives and looked through files, people familiar with the events said. Two former Stanford financial advisers were questioned last month by the Securities and Exchange Commission, according to the people, who declined to be identified because they didn’t want to put their current jobs at risk.

The agencies are investigating Stanford’s sales of certificates of deposit issued by its Antigua-based affiliate, Stanford International Bank Ltd., according to the former employees. The agency has asked former employees about the bank’s stated returns on investment, between 10.3 and 15.1 percent every year from 1995 until last year, according to documents and annual reports on the bank’s Web site. SIB has $8.5 billion in assets and 30,000 clients, according to the site.

[Mayberry Machiavelli]

11. Lotta flashlights gonna shine under a lot of rocks revealing lots of bugs before it's over.

[Mnemosyne]

14. About Stanford > Our Eagle Shield

Our Eagle Shield

At Stanford, we hold ourselves to a higher standard of service and dedication across every dimension of our work. As a privately held company, we focus solely on delivering excellence for our clients.

We know that our difference is achieved through our people. We hire only the best professionals in the industry and encourage a culture of entrepreneurship, hard work, and high standards. To distinguish the men and women of the Stanford Financial Group of companies, every employee wears an eagle shield representing financial strength, integrity and commitment to our clients.

:rofl:

:hi:

[malaise]

17. Too good

People are way too gullible. :hi:

[glitch]

19. Gullible + Greedy = The Perfect Mark

aka your typical Republican (yeah, I know it's not only Republicans that are getting stung, still, it works).

[Mnemosyne]

25. They believe what they want to believe and

disregard the rest.

At least the apathy in the US seems to be lifting, finally. :)

[Fire1]

15. Good!!! Get um all, one by one. Crooks!

[jberryhill]

18. It's okay

He's got a little troll in the back room who spins straw into gold.

Just don't guess his name, or you'll piss him off.