Switch to Desktop Site

Stanford Financial: a sticky wicket for investors?


Donna Carson/Reuters

(Read caption) A Stanford Financial Group customer was turned away at the company's Houston office Feb. 17. US authorities have charged the company's owner, Texas billionaire Allen Stanford, with "massive ongoing fraud."

About these ads

Everything was not quite “cricket” at Stanford Financial, which was shut down on Tuesday by the US Securities and Exchange Commission, which alleges a “massive” fraud over $8 billion in certificates of deposit.

Stanford Financial’s founder, Sir Robert Allen Stanford, a Houston billionaire, is well-known in cricket circles where he had sponsored a $20 million winner-take all tournament in Antigua. He was in the process of negotiating more cricket deals with the England and Wales Cricket Board and the West Indies Cricket Board when the US government raided his offices.

Offered high returns
Cricket is especially popular in nations such as Australia, India, and Britain as well as the English-speaking Caribbean nations. One of those is Antigua, which is also home to Stanford International Bank, which the SEC alleges offered investors interest rates that are well above market rates, supposedly with no risk.

The SEC’s outgoing head of enforcement says Stanford and his family and friends "perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors."

In Madoff's wake


Page:   1   |   2