SEC v. Stanford International Bank,
SEC v. Stanford International Bank, Case No. 3-09CV0298-L (N.D. Tex. Filed Feb. 17, 2009) alleges that the defendants committed an $8 billion fraud which apparently has gone on for years. The defendants are Robert Allen Stanford, Stanford International Bank, an Antigua based company, Stanford Group Company, a Huston based broker-dealer and investment adviser and Stanford Capital Management, an investment advisor. The court granted a temporary freeze order at the SEC’s request.
The alleged scheme centered on the sale of “certificates of deposit” which promised “high return rates that exceed those available through true certificates of deposits offered by traditional banks.” Those returns were achieved through what was supposed to be a unique investment strategy that yielded double-digit returns over the past 15 years.
In a second part of the scheme Stanford Allocation Strategy, a so-called proprietary mutual fund wrap program, took in over $1 billion in investor funds. This program was marketed based on false investment data, according to the SEC.
Financier Robert Allen Stanford, recently interviewed by CNBC about how it feels to be a billionaire, was served with the SEC’s papers on Thursday in Virginia. No criminal charges have been filed to date.
The ABA journal on line reported on Thursday that the SEC filed its action against Mr. Stanford and his entities days after outside counsel for the affiliated investment firm made a “noisy withdrawal.” Counsel reportedly disaffirmed information he had given to investigators and withdrew from his representation.
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