Announcement from Allen Stanford

To the Stanford International Bank depositors, and clients of the global Stanford Financial Group

As this is the first statement from me since the February 17, 2009 destruction of the global Stanford companies, and my imprisonment for allegedly operating a fraud that has been referred to as a "Ponzi scheme", I want to be direct, clear and emphatic. The actions taken by the U.S. government against me and my companies and that resulted in such harm to so many of you, was baseless, opportunistically contrived and, most importantly, unlawful. To many of you, and especially those of you who believe in and trust the accuracy and veracity of the American media machine, for now I will simply advise you of the series of legal actions taken by me in recent months and ask that you look at them on line, read them carefully and then follow their progress through the American legal system. In the coming days and weeks, as these legal initiatives make their way through the courts I will be posting a daily message on this site to keep informed those of you who have been harmed.
Meanwhile, I want all of you to know, the many of you around the world who entrusted me and my companies with your investment monies, that it is my intent, and in fact my mission in this life, to restore my good reputation as an honest man, and to personally repay each and every one of you... in full ...each and every dollar that was so wrongfully taken from you by the Securities and Exchange Commission.
The manner in which I intend to achieve this will be made clear in the coming weeks.

Thank you,

R. Allen Stanford

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Anuncio de Allen Stanford

A los depositantes de Stanford International Bank y clientes del global Stanford FinancialGroup

Como éste es la primera declaración de mí parte desde la destrucción de 17 de febrero de 2009 de las empresas mundiales de Stanford, y mi encarcelación por presuntamente operar un fraude que se ha referido como un "esquema Ponzi", quiero ser directo, claro y enfático. Las medidas adoptadas por el gobierno de Estados Unidos contra mí y mis empresas y que dio lugar a un daño para tantos de ustedes, fue infundada, oportunamente ideado y, lo más importante fue ilegal. A muchos de ustedes y especialmente aquellos de ustedes que creen en y confían en la exactitud y veracidad de la maquinaría de los medios estadounidenses, por ahora simplemente le aconsejaréque revisen una serie de acciones legales tomadas por mí en los últimos meses, y lean atentamente y luego sigan su progreso a través del sistema legal estadounidense. En los próximos días y semanas, a medida que estas iniciativas legales hacen su camino a través de los tribunales, voy a publicar un mensaje diario en este sitio para mantener informado a aquellos que han sido perjudicados.

Mientras tanto, quiero que sepan,a todos ustedesalrededordel mundo quienes confiaron en mí y mis empresas con sus fondos de inversión, que es mi intención y de hecho mi misión en esta vida, restaurar mi buena reputación como un hombre honrado y para personalmente pagar todos y cada uno de ustedes... en su totalidad.. .cada y todo dólar que tan injustamente le fue quitado por la Securities and Exchange Commission.

La manera en la cual tengo la intención de lograr este objetivo se realizará en las próximas semanas.

Gracias

R. Allen Stanford

 

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Allen Stanford Told to Disgorge $6.7 Billion in SEC Case

April 26, 2013
By Andrew Harris

R. Allen Stanford, the Texas financier convicted last year of leading an investment fraud scheme, was ordered to disgorge more than $6.7 billion by the judge in a U.S. Securities and Exchange Commission lawsuit.

U.S. District Judge David Godbey in Dallas issued the order yesterday against Stanford, his Stanford Group Co. and the Antigua-based Stanford International Bank Ltd.

The order may clear the way for Godbey to grant a court- appointed receiver's request to make an interim $55 million payout to investors who lost money after buying certificates of deposit issued by the Stanford Bank.

"The fraud perpetrated was obviously egregious, was done with a high degree of scienter, caused billions in losses and occurred over the course of a decade," Godbey said, using the legal term to describe the mental state of intent to deceive.

A federal jury in Houston convicted Stanford of lying to investors about how their money was being handled.

"The truth is that he flushed it away," Justice Department lawyer William Stellmach told jurors in his closing arguments at the March 2012 trial. "He told depositors he was using their money in one way and the truth was completely different."

Stanford, 63, was sentenced to 110 years in prison. Maintaining his innocence, he has appealed the verdict.

Parallel Judgment

Godbey referred to the jury's guilty finding in granting the SEC's request he render a parallel judgment in their case filed in February 2009, four months before the financier was indicted. The judge also cited the August 2009 guilty plea by Stanford Group Chief Financial Officer James Davis.

"The court finds that $5.9 billion is a reasonable approximation of the gains connected to Stanford's fraud," Godbey said of the sum he would order disgorged. He then added more than $861 million in interest for a total of $6.76 billion. Davis too is jointly liable.

Finally the judge imposed a $5.9 billion penalty on Stanford and a $5 million assessment against Davis, who received a five-year prison sentence.

The court-appointed receiver, Ralph Janvey, asked Godbey this month for permission to begin repaying some of the losses incurred by the more than 17,000 claimants. At an April 11 hearing, the judge told Janvey's lawyer, Kevin Sadler, he was concerned about doing so before a final order had been entered against Stanford.

Societe Generale

In a separate filing today, a group of Stanford investors asked Godbey to grant them a judgment of at least $95 million in a lawsuit against a unit of Paris-based Societe Generale SA. (GLE)

The lender's Societe Generale Private Banking (Suisse) unit took the money from a Stanford bank account with his permission in December 2008 to repay a loan made to him four years earlier, according to court papers.

The financier had caused a business funded by Stanford investor-depositor money to guarantee the loan in 2007, the investors alleged, while those depositors received no benefit. The transfer of that money to Societe Generale just two months before the SEC sued Stanford and shut down his businesses was a fraudulent transfer, the investors claimed in today's filing.

Ken Hagan and Jim Galvin, New York-based spokesman for the French bank, did not immediately reply to voicemail messages seeking comment on the allegations.

Slush Fund

Davis, the CFO, testified at Stanford's trial that the financier maintained a Societe Generale Swiss bank account, funded by investor deposits.

"It was a slush fund, just used for whatever the holder wanted to use it for," Davis said during the Houston federal court trial in February 2012.

The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston).

The investors' case is Rotstain v. Trustmark National Bank, 09-cv-02384, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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Judge approves Stanford class action lawsuit

December 7, 2012
By BILL LODGE

A civil suit by 86 defrauded investors was certified by a Baton Rouge judge Wednesday as a class action against Louisiana's regulator of financial institutions and a Pennsylvania company that compiled customer financial statements on behalf of convicted swindler Robert Allen Stanford.

The ruling by state District Judge R. Michael Caldwell could open the door for some 1,000 investors damaged by Stanford's fraudulent $7.2 billion scheme to join the suit. Those people now have the option to join the original plaintiffs in seeking judgments against the Louisiana Office of Financial Institutions, or OFI, and the financial services firm of SEI Investments Co.

If investors win that suit, OFI and SEI could share liability for as much as $1 billion in losses in Louisiana, according to estimates by their attorneys.

SEI took investment-performance information from Stanford, now serving a prison term of 110 years, and used it for financial statements that went to investors. But both the Pennsylvania firm and OFI deny failing any obligations to investors.

"I do certify this lawsuit as a class action," Caldwell told a courtroom populated by former Stanford investors and attorneys for all sides in the litigation.

The judge noted his decision merely opens the door for more defrauded investors to join the lawsuit against OFI and SEI. Additional litigation will be needed to determine whether those investors are entitled to recover any money from the two defendants for allegedly failing an obligation to warn them of indicators of fraud on Stanford's part.

Many people lost their money, Caldwell said, adding that there were more than 1,000 investor accounts at Stanford Trust Co. in Baton Rouge.

Additional investors' money was drawn into the scheme through Stanford Group Co.

"Some of them lost all of their money," Caldwell said of the victims. "Some of them lost hundreds of thousands of dollars, and some of them lost millions."

Phil Preis, lead attorney for the plaintiffs, said Caldwell's ruling "affords the people of Louisiana their day in court." Preis said his clients "are overjoyed."

Zachary resident and Stanford victim Kathy Mier said, "I am very, very, very excited, very happy. Someone has listened, and I'm ready to go on."

Mier and her husband, Louis Mier, lost $240,000 of their retirement nest egg to Stanford, 62.

"For the first time in a long time, I felt like someone really listened to us, and we're moving forward with our fight," Kathy Mier said.

Debbie and Ken Dougherty, of Central, recovered their principal investment in Stanford's certificates of deposit at his bank on the Caribbean island of Antigua before federal officials shut down his operations in February 2009. But they continue to face demands from a court-appointed receivership in Dallas for return of more than $100,000 in profits.

"I know this is just one hurdle, but it's huge," Debbie Dougherty said after Caldwell's certification of the class action lawsuit. "If we can get something for those folks who got nothing, then this (court fight) will be worth it."

Attorneys for OFI and SEI, however, said long before Caldwell's ruling that the government agency and financial services corporation did not violate any obligations to investors and will fight investor claims in court.

"The role of OFI is to regulate, not to ensure that those who invest in companies subject to OFI regulation will never lose money as a result of criminal actions," OFI attorney David Latham wrote in one court filing.

In May 2011, however, former Stanford employee-turned-whistleblower Charles W. Rawl testified in Washington, D.C., before the House Financial Services Subcommittee on Oversight and Investigations. Rawl told members of Congress that he advised OFI officials of corrupt Stanford practices in 2008.

In late summer 2008, Rawl testified, OFI officials blocked future sale of additional Stanford bank certificates of deposit into Individual Retirement Accounts at Stanford Trust Co.

Preis said after Caldwell's ruling: "The state examined the trust company. For a period of four years, we allege, they (OFI officials) knew of (Stanford's) Ponzi scheme."

A Ponzi is not a legitimate investment program. From beginning to end, it is intended to do nothing more than drain money from investors and transfer those assets to criminals. Early investors are paid dividends in order to attract new investors, whose money prolongs the scheme.

Both the Securities and Exchange Commission and the U.S. Attorney's Office in Houston alleged in 2009 that Stanford's operations were fraudulent from the beginning. Federal judges in Dallas and Houston have since agreed with that assessment.

But those court rulings have yet to benefit any defrauded investors. And they did not target any blame toward OFI and SEI.

SEI attorney J. Gordon Cooney Jr. told Caldwell two months ago that SEI did not falsify any information in investors' financial statements, which routinely showed healthy profits, even as Stanford's worldwide empire was collapsing.

All financial information used in those statements was provided by Stanford or his employees, Cooney added. He said SEI did not knowingly participate in the dissemination of false information to investors.

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HSBC lapses left US economy exposed to exploitation by terrorists - Senate report

July 17, 2012
By Richard Blackden

HSBC left America's financial system exposed to exploitation by drug cartels and terrorist organisations due to its failure to comply with anti-money laundering laws, according to a damning US Senate report.

These are two of the findings in a 340-page study from the US Senate that accuses Britain's biggest bank of a series of compliance lapses between 2004 and 2010.

HSBC, the only British bank with a branch network in America, failed to properly staff its compliance department and wrongly designated Mexico as a "low-risk" country.

The findings are a major embarrassment for HSBC, some of whose senior executives will appear before the Senate committee tomorrow to explain the failings.

In one of the more damaging accusations, the report says HSBC resumed providing banking services to a Saudi Arabian bank despite speculation it had links to financing terrorism.

In an emailed statement, HSBC said the Senate report had provided "important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system".

The bank said it is spending more money on compliance and has become more coordinated in policing high-risk transactions.

HSBC is also criticised by the committee for designating Mexico as "low-risk" despite the widespread use of the country's banking system by drug cartels. The decision made it easier for money to be moved between HSBC's affiliate bank in Mexico and its network in the US. Its Mexican bank should have been treated as a "high-risk correspondent client subject to enhanced due diligence and monitoring," the report said.

The report also contained strong criticism of the Office of the Comptroller of the Currency, a top US bank regulator, saying the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues "to accumulate into a massive problem".

HSBC has warned investors that it could face a significant fine in the US, with some analysts speculating the penalty could reach $1bn.

"Accountability is essential and that is what has been missing here," said Carl Levin, the chairman of the committee on permanent investigations. HSBC said last night that it had taken several steps to improve its compliance, including doubling its spend on compliance and enforcing standards globally.

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Judge Hands SEC Initial Victory in Suit Against Insurance Fund

February 10, 2012
By ANDREW ACKERMAN

A federal judge Thursday handed the Securities and Exchange Commission a partial victory in its suit against an agency that insures U.S. brokerage accounts to force it to pay investors in R. Allen Stanford's alleged $7 billion Ponzi scheme.

U.S. District Court Judge Robert Wilkins ruled the SEC didn't need to go through a full-fledge civil trial to force the Securities Investor Protection Corp. to start a liquidation proceeding to begin compensating Mr. Stanford's victims.

Judge Wilkins ruled that a trial, which SIPC sought, didn't comport with the agency's purpose of providing "prompt, summary proceedings" when a securities firms fails. Instead, he ordered a "summary proceeding," that would be fully briefed by the end of February.

But it wasn't a total legal victory for the SEC. The agency had essentially argued that it could determine on its own if SIPC had failed in its responsibilities. "This contention is untenable," Judge Wilkins wrote. "This determination must be made by the court, not unilaterally by the SEC."

In a statement, SEC Chief Litigation Counsel Matthew Martens said the agency is pleased with the judge's decision to expedite the case in lieu of "full-blown litigation that could drag on for years and greatly delay relief to the Stanford investors."

"We look forward to a prompt resolution of this important matter so that claimants can have the chance to seek judicial review of their claims," he said.

A spokesmen for SIPC couldn't be reached for comment.

Federal prosecutors and the SEC charged Mr. Stanford in 2009 with fabricating high returns to lure investors around the world to buy about $7 billion of fictitious certificates of deposit from Stanford International Bank Ltd. in Antigua, the island where he was knighted. Mr. Stanford is alleged to have misappropriated billions of dollars of investor money and invested an undetermined amount in unprofitable private businesses he controlled. He has denied the charges and his trial began last month.

The SEC filed its lawsuit against SIPC in December, after negotiations between the two agencies reached an impasse on the Stanford matter. It is the SEC's first lawsuit against SIPC in the insurance fund's 42-year history.

The dispute hinges on how SIPC's mission is interpreted and builds on the SEC's bid to protect investors more aggressively in the wake of several high-profile missed cases. SIPC maintains a special reserve fund authorized by Congress to compensate investors who lose money in failed brokerage firms.

The SEC, several lawmakers and numerous Stanford customers contend SIPC should use its powers to help Mr. Stanford's alleged victims. SIPC says it can't do so because Mr. Stanford's alleged victims didn't lose money in a failed brokerage firm; they bought CDs issued by a bank and continue to hold those assets, even if they are worthless.

The SEC said in June that it disagrees with SIPC's stance and authorized the lawsuit if SIPC didn't begin a liquidation of Stanford Group, a U.S.-based broker-dealer through which Mr. Stanford sold the certificates to American investors.

Roughly 7,800 people bought their CDs through Stanford Group, which is a SIPC member, according to estimates by the court-appointed receiver in the case, Ralph Janvey. In its June analysis, the SEC argued that SIPC's position elevates form over substance and ignores the fact that Stanford allegedly structured the various entities of his financial empire principally to carry out a single fraudulent Ponzi scheme.

Even if the SEC ultimately prevails in its suit against SIPC, Judge Wilkins signaled Thursday it wouldn't immediately lead to relief for Mr. Stanford's victims. A Texas court overseeing Mr. Janvey would ultimately decide on the merits of any claims filed by former customers, Judge Wilkins said.

Source.

You can find here the complete information in pdf file:

Judge Wilkins Opinion regarding SEC SIPC Order.

Order to SIPC to Show Cause.

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Block SEC Nominees Until Stanford Victims Get Answers

June 14, 2011

(Washington, D.C.) – U.S. Sen. David Vitter today announced that he will block the nominations of two Securities and Exchange Commission members until the SEC responds to a request by victims of the alleged Stanford Group Co. Ponzi scheme who are seeking to receive Securities Investor Protection Corporation coverage for their losses.

"Unfortunately, the SEC has not yet given the Stanford victims an answer despite my repeated conversations with Chairwoman Mary Schapiro," said Vitter. "Many of these folks in Louisiana and along the Gulf region lost their life savings, and they at least deserve a direct answer on their request for coverage. After months of delay the commission has now met a number of times to consider SIPC coverage for Stanford's victims. It would be salt in the wound of these victims for Congress to force those discussions to start over by approving new commissioners.

"We've known for some time that the SEC waited far too long to take action against Allen Stanford, and now they're dragging their feet in responding to the victims. I will continue to hold them accountable – including holding these nominations – until these fraud victims get an up-or-down answer from the SEC on SIPC so they can move forward in the process, and if necessary, file a judicial appeal."

At a U.S. Senate Banking Committee hearing last year, Vitter raised concerns about the SEC's misleading statements about its handling of the Stanford case. An Inspector General's report showed the SEC's examination office had been looking into the Stanford Group since 1997 and were concerned it was a "possible Ponzi scheme," but at a previous banking committee hearing, SEC officials claimed the investigations only began in 2004.

The SEC has five commissioners who are appointed by the President with the advice and consent of the Senate. Mr. Daniel M. Gallagher (a partner at the law firm Wilmer Cutler Pickering Hale & Dorr LLP) has been nominated to fill the seat being vacated by Commissioner Kathleen Casey and the Honorable Luis Aguilar is being re-nominated because the term for which he is now serving expires June 5, 2010. Vitter is concerned that because the Commission has claimed to be close to a ruling, bringing a new commissioner into the mix would unnecessarily slow down the pace.

Once the SEC issues a recommendation on the coverage of claims of Stanford's alleged victims, Vitter would release his hold on SEC nominees Luis Aguilar and Daniel Gallagher, his office said.

Some of Vitter's comments at the hearing:

"I unfortunately came away from today's hearing even more convinced that the SEC has been purposely misleading this committee about the agency's mishandling of the Stanford case," said Vitter. "The Inspector General's latest report clearly showed that the SEC's examination office had been looking into the Stanford Group since 1997 and were concerned it was a ''possible Ponzi scheme.'' Yet, at a Senate Banking Committee hearing last August, SEC officials claimed the investigations only began in 2004.

"As if the fraud Stanford committed wasn't bad enough, the agency's attempts to cover up its negligence pour salt on the wound of Stanford's victims, who have already lost much of their life savings.

"There are critical discrepancies between the IG report and the testimony we've heard from SEC officials, and Ms. Romero's answers to the Senate Banking Committee raise more questions about her credibility and those who helped her prepare her testimony. I'm going to continue demanding answers and working with the Senate Banking Committee to get the answers Stanford's victims deserve because it's not yet clear how high up the chain the deception goes at the SEC."

Source.

Boustany Seeks Justice for Stanford Victims

Washington, DC – U.S. Congressman Charles W. Boustany, Jr., MD (R-Southwest Louisiana), a leading voice in Congress for the victims of the Stanford Ponzi schemes, today praised his Senate colleague for pledging to stop the nominations to the Securities and Exchange Commission (SEC). U.S. Senator David Vitter announced he will block the nominations of Daniel M. Gallagher and Luis Aguilar to the SEC until the commission assists victims of the Stanford schemes with Securities Investor Protection Corporation coverage.

"We must continue to fight the Administration for the answers they are unwilling to provide," Boustany said. "These nominees should be withheld until the SEC answers the questions I've asked on behalf of the victims of this scheme. I am determined, along with Senator Vitter, to help Stanford victims gain financial relief and will continue to push for remedies through the SEC and in Congress."

In April, Congressman Boustany demanded answers from the SEC on their efforts to assist Stanford victims. The SEC response defended their two-year investigation but provided no further details.

Congressman Boustany also joined Representative Bill Pascrell, Jr. (D-NJ) to introduce the Ponzi Scheme Victim's Tax Relief Act of 2011. The bill expands the net operating loss carryback period for investors in a Ponzi-type scheme from five to 10 years. Victims who lost money in a Ponzi scheme can recoup the losses by declaring them as net operating losses during previous tax years and collecting refunds from those tax years.

Paul Coussan
Press Secretary
Rep. Charles Boustany, Jr. MD (LA-07)
1431 Longworth House Office Building
Washington, DC 20515
(337) 288-1665
Paul.Coussan@mail.house.gov
www.boustany.house.gov

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Letter to the Chronicle’s Editor Regarding the SEC’s Failure to Protect the Stanford Group’s Victims

Letters to the editor
HOUSTON CHRONICLE
March 15, 2011

Agencies failed

It has been more than two years since 1,290 Texans lost their life savings in the R. Allen Stanford debacle. Many of the victims were teachers, nurses and firefighters, and these losses reflect most, if not all, of the retirement funds they accumulated over many years of hard work. These Texans relied on the Securities Exchange Commission (SEC) to uphold its federal mandate to protect investors, and despite numerous warnings about Stanford Financial over several years, the SEC failed to act on behalf of investors.

In 2010, SEC Inspector General David Kotz revealed the SEC was aware as early as 1997 that Stanford investors’ funds were in jeopardy of being stolen. It wasn’t until 2004 — seven years after the SEC first became aware of problems at Stanford — that it opened an official investigation. By the time the SEC took action in this case, it was too late for the Stanford victims who had lost virtually everything.

To make matters worse, the Stanford investors were customers of Stanford Group Co. (SGC), a broker-dealer that was a member of the Securities Investor Protection Corp.(SIPC). SIPC allowed SGC to use its seal for brochures, promotional materials and correspondence to give investors additional confidence. “Member SIPC” was adorned on its correspondences to investors, yet to date SIPC, which is under SEC authority, has refused to provide any remedy for Stanford victims. Customers of the Stanford broker dealer have been denied coverage, despite previous cases where investors in similar situations were covered. Skip Swingle, a victim of SGC, aptly warned, “I don’t think it’s just Stanford victims that should be concerned about what’s going on, but everybody.”

On Monday I sent a letter to SEC Chairman Mary Schapiro asking again for an expedited review of this issue. No one can restore all that these victims lost. We cannot replace the trust that was violated, nor can we say that this fraud won’t happen again. What the SEC and SIPC can and should do is live up to the mandate of encouraging investment by establishing customer confidence. If they do not, brokerage firms across the country might reconsider the placement of the SIPC seal, and investors will see it as a symbol of caution, not protection.

— U.S. REP. JOHN CULBERSON,
7th Congressional District of Texas

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