This morning the SEC filed a complaint against Allen Stanford, the Stanford group and the Stanford International Bank.
Reading through the article some things sound very familiar:
SIB is operated by a close-knit group of family and friends. The firm’s investment committee, which oversees the bank’s portfolio, is made up of Stanford; his father, who lives in Mexia, Texas; Pendergest-Holt, who, the SEC says, had no financial services experience prior to joining Stanford Financial Group; and Davis, who was Stanford’s college roommate.
Follower are some more details of the sec complaint
- SIB reported identical returns of 15.71 pct in 1995 and 1996, which the SEC called “improbable” and suspicious.
- Ninety percent of SIB’s claimed investment portfolio is in a “black box” shielded from any independent oversight, and only Stanford and aide James Davis, also charged, knew details of the bulk of the portfolio.
- Stanford failed to cooperate with the SEC’s probe and continued to mislead investors by falsely saying the SEC had frozen accounts to withdrawal or the company had ordered a moratorium on CD redemptions.
- A major, unidentified clearing firm stopped processing wires to SIB for purchase of SIB-issued CDs after the clearing firm was unable to obtain information about the company’s financial condition.
- Stanford used also false information to promote a mutual fund wrap program separate from the CDs. The program grew to more than $1.2 billion from less than $10 million in 2004.
