The Securities and Exchange Commission accused Sir Allen Stanford of a massive, ongoing $8 billion fraud, writing in a complaint that Standford and his firms were touting “improbable, if not impossible” returns. Another Madoff-like scenario? Not quite.
Allen Stanford Accused of ‘Massive, Ongoing’ Fraud 
Feb. 17 (Bloomberg) — By David Scheer and Alison Fitzgerald
U.S. regulators accused R. Allen Stanford of running a "massive, ongoing fraud," through his Houston-based Stanford Group Co. while selling about $8 billion in certificates issued by an affiliated bank in Antigua.
Stanford International Bank touted “improbable, if not impossible” returns, the Securities and Exchange Commission said today in a complaint against Stanford, firms he controls and two colleagues. A federal court in Dallas agreed to freeze assets and appoint a receiver to account for investor money.
“We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world,” Rose Romero, director of the SEC’s Fort Worth office, said today in a statement. Stanford spokesman Brian Bertsch referred questions to the regulator.
The SEC has been investigating Stanford Group since at least last summer over sales of the certificates. The inquiry intensified after the December arrest of New York money manager Bernard Madoff, who allegedly confessed to masterminding a $50 billion fraud in which early investors were promised steady returns and paid with money from later participants.
The U.S. Marshal’s office in Houston sent a 15-person task force to secure files and computers at Stanford’s offices in the Galleria shopping district about 10 a.m. Texas time, and remained with employees, said Marshals spokesman Alfredo Perez. “Once everybody leaves, the offices will be locked down,” he said…
Stanford Group, selling the certificates through a network of financial advisers, told clients their funds would be placed mainly in easily sellable financial instruments, monitored by more than 20 analysts and audited by regulators on the Caribbean nation of Antigua, the SEC said.
Instead, the “vast majority” of the portfolio was managed by Allen Stanford and the Antigua subsidiary’s chief financial officer, James Davis, according to the regulator. A “substantial” part of the portfolio was invested in private equity and real estate, it said…
Stanford Group’s alleged fraud wasn’t limited to the sale of certificates of deposit, the SEC claimed. Since 2005, SGC advisers sold more than $1 billion of a proprietary mutual fund “wrap program,” named Stanford Allocation Strategy, “by using materially false and misleading historical performance data,” according to the SEC complaint…
Stanford said in a Feb. 12 e-mail to his employees that he’d “fight with every breath to continue to uphold our good name” in the face of the investigations…
The SEC has stepped up probes after being accused of failing to heed warnings that Madoff’s investment returns were too good to be true. Madoff was arrested Dec. 11 after allegedly telling his sons that his business was a $50 billion Ponzi scheme. The SEC has since announced unrelated lawsuits against at least seven money managers for allegedly inflating profits or siphoning off client money…
Full article here.
Joe Weisenthal at ClusterStock digs up more information about Sir Allen:
Shady Stanford Paid Dems To Kill Money Laundering Bill
Allen Stanford wasn’t just a friend of Dubya’s, he was also in bed with some top Democrats, wining them over in his attempt to fight off an anti-money laundering bill that had been pushed by Bill Clinton.
Public Citizen has the rundown…
Allen Stanford: Friend Of Dubya
As some commenters have noted, it seems alleged fraudster "Sir Allen" may be the latest in a long line of inglorious Bush cronies. Stanford was fetted in 2006 by the "Inter-American Economic Council" a Latin-American business group at an event hosted buy then-President George W. Bush and his wife Laura…
Just Like With Madoff, The SEC Blew It On The Stanford Fraud
The SEC made the big bust this time. They nailed Stanford Bank for being a big fraud. All on their own. Go SEC!
But wait, maybe this isn’t so impressive as it seems. Turns out their investigation was going on for two years…
Why Allen Stanford Is No Bernie Madoff
