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Bloomberg – Stanford Group Co.’s court-appointed receiver and securities regulators asked a U.S. judge to deny requests by hundreds of investors to join the regulatory lawsuit at the heart of an $8 billion fraud investigation.
The receiver, Ralph Janvey, and the U.S. Securities and Exchange Commission yesterday filed papers in federal court in Dallas opposing the requests by more than 45 groups of investors and creditors who have asked permission to join the SEC’s suit against R. Allen Stanford.
“Allowing all the investors to intervene in the enforcement action would destroy any hope for an efficient distribution of assets,” Janvey said in a court filing late yesterday. He said he’s working “as quickly as possible to release more accounts through a certification process” designed to free all frozen funds not directly linked to the suspected fraud.
Most of the groups asking to join the SEC’s fraud case are investors whose brokerage accounts were frozen along with Stanford’s personal and corporate assets when regulators sued the Texas financier, two associates and three affiliated companies on Feb. 17. Stanford is suspected of orchestrating the fraud through the sale of high-yield certificates of deposit by Antigua-based Stanford International Bank.
Last week, Janvey won court approval to release $4.6 billion from about 28,000 frozen brokerage accounts. U.S. District Judge David Godbey extended the freeze on more than $1 billion in about 4,000 remaining Stanford accounts, most of which belong to Stanford employees or executives or are linked to investments issued by the Antiguan bank.
Reuters – Two employees of Allen Stanford’s financial business, which U.S. regulators have accused of massive fraud, held advisory roles at a watchdog group overseeing U.S. broker-dealers aimed at preventing abuses.
Lena Stinson, director of global compliance at Stanford Financial Group, served on the membership committee of the Financial Industry Regulatory Authority, or FINRA, which describes itself as the largest independent regulator of U.S. securities firms.
Frederick Fram, the chief operating officer of Stanford Group Holdings, served on the FINRA continuing education content committee, "where he participates in creating material for the Regulatory Element continuing education program," according to a biography on Stanford’s website.
The Stanford executives resigned from their posts last week at FINRA’s request, Brendan Intindola, a FINRA spokesman, said.
Stanford Group Co is a member of FINRA. Calls to Stanford’s Houston offices were not answered.
The firm referred all press inquiries to the U.S. Securities and Exchange Commission, which last week accused the Texas billionaire and two of his associates of a "massive ongoing fraud" related to the sale of $8 billion in certificates of deposit.
MSNBC – On the streets of Antigua, Texas billionaire Allen Stanford is a controversial figure. Some embrace him while others deride him as a modern-day colonialist.
But nearly all say they fear a U.S. investigation into the tycoon’s financial empire and Antigua-based offshore bank could damage the Caribbean island where Stanford is a household name, its biggest private employer and powerful business force.
"He’s providing jobs. He’s good for the economy. If he’s in trouble, that’s bad for us all," said George Green, manager of Cool Down Cafe, a hole-in-the-wall restaurant on a narrow street in St. John, the island’s capital.
Green’s comment was echoed across the twin-island nation of Antigua and Barbuda on Monday as news spread of a deepening probe into Stanford’s $50 billion Houston-based investment operation, Stanford Group Co, and its Antigua-based affiliate, Stanford International Bank.
