The Securities and Exchange Commission is charging Robert Allen Stanford and three of his companies for their alleged involvement in a multibillion dollar investment fraud scheme. His companies that are named in the complaint include Stanford International Bank (SIB), Stanford Group Company (SGC), which is a Houston-based investment adviser and broker dealer, and Stanford Capital Management, which is based in Antigua. The SEC is asking for emergency relief for the investors that have been victimized by the alleged scheme.
The SEC complaint, filed in Dallas, Texas accuses Stanford and friends and family that he works with of orchestrating the investor scam. The SEC claims that SIB used SGC financial advisers to sell some $8 billion worth of “certificates of deposit” to investors with the promise they would receive high interest rates that were, in fact, unsubstantiated and improbable. The SEC says the defendants misrepresented these CD’s when they told investors that they were safe.
The SEC complaint also contends that another scam involving $1.2 billion in sales of Stanford Allocation Strategy (SAS), which is a proprietary mutual fund wrap program, involved the use of materially bogus historical performance information that helped SGC to grow the SAS program from under $10 million in 2004 to over $1 billion. In 2007 and 2008 , SGC earned fees of about $25 million as a result. The program’s bogus performance was used to bring in registered investment advisers with substantial books of business. These advisers were then provided with substantial incentives to transfer client assets to SIB’s CD program.
Following the SEC’s request for relief, a US district court judge frozen the assets of the defendants, issued a temporary restraining order, and named a receiver to take charge of the assets.
Robert Allen Stanford is from Texas. His businesses have attracted a wide range of investors, including young businessmen, middle-class Americans, and retirees wanting to place their money in short-term CD’s in exchange for higher returns.
In Houston, Stanford investors are reacting to news of the alleged investment scam and hundreds of them have been reaching out to Stanford investment advisers to find out how to get their money back. “Many people automatically thought Stanford CD’s were insured,” says Shepherd Smith Edwards & Kantas, LLP Founder and Stockbroker Fraud Attorney William Shepherd. Now, however, there are reports this may not have been the case. The Texas securities fraud lawyer and his partners are being contacted by many Stanford investors who are worried about their money.
Shepherd Smith Edwards & Kantas LTD LLP is one of the largest securities fraud law firms in the United States that represents investors who wish to recover their investment losses. Over the last two decades, we have handled over a thousand cases against financial firms for our investors. We are currently at “ground zero” with this case.
SSEK Investment Fraud Attorney Shepherd says, “Class action cases seeking losses in investments have historically resulted in recovery of less than 10% of what the investor’s lost.” Our securities fraud law firm will handle each Stanford investor’s claim individually.
Related Web Resources:
SEC Charges R. Allen Stanford, Stanford International Bank for Multi-Billion Dollar Investment Scheme, SEC.gov, February 17, 2009
Read the SEC Complaint (PDF)