Sir Allen Stanford, a US Virgin Islands resident but a citizen of Antigua with extensive interests there, has been charged by the US securities regulator in relation to a “massive” investment fraud, according to media reports. Sir Allen’s operations include banking, property, newspapers and a cricket ground.
The Securities and Exchange Commission says that Stanford International Bank, based in Antigua, sold about $8 billion in "certificates of deposits", offering “improbable and unsubstantiated high interest rates”, calling the alleged fraud one “of shocking magnitude that has spread its tentacles throughout the world”.
The
SEC accused the bank of falsely claiming that customers’ deposits were safe and that it invested client funds primarily in “liquid” financial instruments. It also said the bank had falsely claimed no “direct or indirect” exposure to the Madoff debacle.
According to the
SEC, the bank is run by Sir Allen’s family and friends. His father, who lives in Texas, is on the investment committee. James Davis,
SIB chief financial officer and college room-mate of Sir Allen, also serves on the committee. The other member is Laura Pendergest-Holt, chief investment officer of Stanford Financial Group, who prior to joining
SFG had no financial services or securities experience. The regulator has also charged Mr Davis and Ms Pendergest-Holt.
A
US judge has granted the
SEC’s request for a temporary restraining order on Mr Stanford’s operations, an asset freeze and the appointment of a receiver for assets. The
SEC is seeking financial penalties and forfeited profits.
Stanford referred calls to the
SEC. A notice at the group’s Houston office said: “The company is still in operation but under the management of a receiver.”
