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
Stablecoin consortia may be ‘interim’ step to solo bank issuance
Former Citi payments head and Ubyx founder says all G-Sibs will issue their own coins
Report once: will Esma’s €1bn reforms deliver the full picture?
Critics say plan to merge three reporting regimes will see scant returns, and won’t mesh with single-sided reporting
CFTC accused of ‘double standards’ on compute futures
Duffy questions ‘long review’ of CME’s contract when Kalshi already offers similar product
Europe’s banks can’t agree on how to fix the output floor
Some want market risk excluded, while others push for greater savings from credit modelling
SEC gunning to take over Cat in 2027
Regulator's bid for control of market surveillance apparatus splits industry participants
FCMs back CFTC proposal granting opt-out from CME oversight
New rules aim to address conflicts of interests at vertically integrated exchange groups
Banks urge Singapore to relax exposure limit on crypto assets
Lower capital for tokenisation and stablecoins welcomed, but cap will curb bank involvement for now
Larger EU players move slower on clearing relocation, says Esma
Active accounts rule driving smaller firms onshore; regulator ready for bigger role if lawmakers want