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.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Will Iosco’s guidance solve pre-hedging puzzle?
Buy-siders doubt consent requirement will remove long-standing concerns
Responsible AI is about payoffs as much as principles
How one firm cut loan processing times and improved fraud detection without compromising on governance
Could one-off loan losses at US regional banks become systemic?
Investors bet Zions, Western Alliance are isolated problems, but credit risk managers are nervous
SEC poised to approve expansion of CME-FICC cross-margining
Agency’s new division heads moving swiftly on applications related to US Treasury clearing
ECB bank supervisors want top-down stress test that bites
Proposal would simplify capital structure with something similar to US stress capital buffer
Clearing houses warn Esma margin rules will stifle innovation
Changes in model confidence levels could still trip supervisory threshold even after relaxation in final RTS
BlackRock, Citadel Securities, Nasdaq mull tokenised equities’ impact on regulations
An SEC panel recently debated the ramifications of a future with tokenised equities
CCPs trade blows over EU’s new open access push
Cboe Clear wants more interoperability; Euronext says ‘not with us’