SEC charges Allen Stanford with $8 billion fraud
Federal regulators charged R Allen Stanford & 3 of his cos with a massive fraud that centered around high-interest-rate certificate of deposits. Madoff's duped firms
By Agencies |
NEW YORK: Federal regulators on Tuesday charged Texas financier R Allen Stanford and three of his companies with a "massive" fraud that centered around high-interest-rate certificate of deposits.
In a complaint filed in federal court in Dallas, the Securities and Exchange Commission alleged Stanford orchestrated a fraudulent investment scheme centered on an $8 billion CD program that promised "improbable and unsubstantiated high interest rates."
Stanford's assets, along with those of the three companies, were frozen. Stanford's companies include Antigua-based Stanford International Bank and broker-dealer Stanford Group Co and investment adviser Stanford Capital Management, which are both based in Houston.
The bank's chief financial officer, James Davis, and Stanford Financial Group's chief investment officer, Laura Pendergest-Holt, were also charged in the complaint.
Alfredo Perez, a spokesman for the US Marshal's Service in Houston, confirmed that agents raided Stanford's office in Houston Tuesday morning, but he did not have any other immediate comment.
The SEC alleged Stanford and his businesses misrepresented the safety of the deposits, claiming the bank reinvested client funds in liquid financial instruments to help return profits on investments sharply higher than average rates than similar products.
The SEC is cooperating with the Financial Industry Regulatory Authority, the U.S. brokerage industry's self-policing body, as part of the ongoing investigation.
In a complaint filed in federal court in Dallas, the Securities and Exchange Commission alleged Stanford orchestrated a fraudulent investment scheme centered on an $8 billion CD program that promised "improbable and unsubstantiated high interest rates."
Stanford's assets, along with those of the three companies, were frozen. Stanford's companies include Antigua-based Stanford International Bank and broker-dealer Stanford Group Co and investment adviser Stanford Capital Management, which are both based in Houston.
The bank's chief financial officer, James Davis, and Stanford Financial Group's chief investment officer, Laura Pendergest-Holt, were also charged in the complaint.
Alfredo Perez, a spokesman for the US Marshal's Service in Houston, confirmed that agents raided Stanford's office in Houston Tuesday morning, but he did not have any other immediate comment.
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The SEC alleged Stanford and his businesses misrepresented the safety of the deposits, claiming the bank reinvested client funds in liquid financial instruments to help return profits on investments sharply higher than average rates than similar products.
The SEC is cooperating with the Financial Industry Regulatory Authority, the U.S. brokerage industry's self-policing body, as part of the ongoing investigation.
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