Another Madoff Surfaces - Part 3

February 18. 2009

R. Allen Stanford is another Madoff

A Texas billionaire, R. Allen Stanford, is in hot water for “running a massive, ongoing fraud” regarding certificates of deposit. That’s really horrible, as it's the one financial instrument people usually feel safe putting their investments in and he abused that trust. He has been charged by the SEC, as the bank could not confirm the numbers Mr. Stanford has been touting in his company's portfolio for the past 10 years.

Why is the SEC just checking this now, when he has been doing this for a decade. As I stated months ago, investment companies should be forced to regularly account for the capital they claim they manage: 

("Why was there no oversight legally compelling someone managing that large a sum to show authentic, accurate and current financial documentation of the figures he was claiming he controlled and the so-called high yields" - December 22. 2008).

Stanford Attorney’s Exit ‘Screams Fraud,’ Spurred SEC

Stanford, the 58-year-old billionaire now accused of running a “massive, ongoing fraud,” spent his final weeks at the firm struggling to soothe clients while disregarding subpoenas that sought to account for almost $8 billion of their money, according to a lawsuit filed yesterday by the Securities and Exchange Commission. Regulators pounced days after a lawyer at the Antigua bank at the heart of the case “disaffirmed” everything he had told authorities…

The SEC’s civil suit accused Antigua-based Stanford International Bank of touting “improbable, if not impossible” returns while selling certificates of deposits to investors for more than a decade. A federal judge in Dallas agreed to freeze assets and appoint a receiver to account for the roughly $8 billion investors spent on the CDs, according to the SEC.

http://www.bloomberg.com