SEC charges Stanford with $8 billion fraud
US regulators have charged Texan financier Allen Stanford with an alleged $8 billion swindle
WASHINGTON, DC - Texan financier Allen Stanford has been charged by the Securities and Exchange Commission (SEC) with orchestrating an $8 billion fraud. The US regulator's complaint accuses Stanford and three of his companies of investment fraud through the issuance of $8 billion (£5.6 billion) of self-styled certificates of deposits, promising improbably high return rates to investors.
The SEC complaint alleges a "massive" deception involving the Antigua-based Stanford International Bank (SIB), Houston-based broker-dealer and investment adviser Stanford Group Company (SGC), and investment adviser Stanford Capital Management.
The SEC also charged SIB chief financial officer James Davis as well as Laura Pendergest-Holt, chief investment officer of the Stanford Financial Group (SFG), in the enforcement action. The regulator has now filed temporary restraining orders and frozen the defendants' assets.
Investments were sold through SIB, which claimed to have delivered "double-digit returns" over the past 15 years via a "unique investment strategy". In 1995 and 1996 it claimed to offer as much as 15.71% return. The case has echoes of Bernard Madoff's $50 billion Ponzi scheme, which hoodwinked the SEC, institutional and private investors for years, until its discovery in December 2008.
Stanford became the first American to receive a knighthood from Antigua and Barbuda in 2006. He holds dual citizenship with that country and the US. Prior to Madoff's outing he too had reached the pinnacle of respectability - attracting a number of Hollywood clients and charitable foundations to his giant swindle.
Rose Romero, regional director of the SEC's Fort Worth, Texas office said: "We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world."
The SEC complaint may be downloaded here.
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