Twenty20 Stanford charged with multi-billion fraud
Tuesday 17 February 2009
Billionaire financier and cricket entrepreneur Sir Allen Stanford was today charged by US regulators over an alleged multi-billion dollar fraud.
The Securities and Exchange Commission (SEC) filed a complaint in a Dallas Court against Stanford and three of his companies for "orchestrating a fraudulent, multi-billion dollar investment scheme".
The England and Wales Cricket Board confirmed tonight it has suspended negotiations with Twenty20 backer Stanford over a new sponsorship deal. Stanford funded a US$20 million winner-takes-all match between England and a West Indies select team last November.
The SEC alleges that about $8 billion of so-called certificates of deposit were sold to investors by promising "improbable and unsubstantiated high interest rates."
The SEC said it was alleging fraud "of a shocking magnitude" with "tentacles throughout the world".
Linda Chatman Thomsen, director of enforcement at the SEC, said: "Stanford and the close circle of family and friends with whom he runs his businesses perpetuated a massive fraud based on false promises and fabricated historical return data to prey on investors."
The Texas-born businessman currently holds dual citizenship with Antigua and Barbuda. He became the first American to be knighted by the Commonwealth nation in 2006.
The SEC statement continued: "The SEC's complaint, filed in federal court in Dallas, alleges that acting through a network of SGC (Stanford Group Company) financial advisers, SIB (Stanford International Bank) has sold approximately eight billion US dollars of so-called "certificates of deposit" to investors by promising improbable and unsubstantiated high interest rates.
"These rates were supposedly earned through SIB's unique investment strategy, which purportedly allowed the bank to achieve double-digit returns on its investments for the past 15 years."
The SEC say in their complaint that Stanford and fellow defendants, SIB chief financial officer James Davis and Laura Pendergest-Holt, the chief investment officer of Stanford Financial Group, had "misrepresented to CD purchasers that their deposits are safe".
"As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, director of the SEC's Division of Enforcement.
"We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."
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