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
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’
Who is Selig? CFTC pick is smart and social, but some say too green
Colleagues praise crypto smarts and collegial style, but views on prediction markets and funding trouble Senate
EU single portal faces battle to unify cyber incident reporting
Digital omnibus package accused of lacking ambition to truly streamline notification requirements
Basel Committee members ‘buying time’ before fixing FRTB mess
Despite inconsistencies today, regulators maintain they want to align global regime eventually
How Basel III endgame will reshape banks’ business mix
B3E will affect portfolio focus and client strategy, says capital risk strategist
Derivatives industry blasts EU reporting framework
Complaints about duplicate and ambiguous trade reporting requirements aired at Esma’s Data Day
Why source code access is critical to Dora compliance
As Dora takes hold in EU, access to source code is increasingly essential, says Adaptive’s Kevin Covington