Authorities seize Antigua bank

Regulators take over Caribbean bank owned by US billionaire as fraud probe continues.

    Stanford was served with legal papers in
    the US on Thursday [Reuters]

    US authorities raided Stanford's Houston offices on Tuesday after the US Securities and Exchange Committee (SEC) accused him of "massive" fraud and froze the assets of his three main companies.

    He was served with the legal papers by agents from the Federal Bureau of Investigation on Thursday in the US state of Virginia.

    An SEC spokesman said Stanford and his two co-defendants, James Davis, Standford International Bank's chief financial officer, and Laura Pendergest-Holt, chief investment officer of a Stanford affiliate, had also surrendered their passports.

    Latin America panic

    The Texan billionaire is accused, along with Davis and Pendergest-Holt, by the US Securities and Exchange Committee (SEC) of falsely selling $8bn in certificates of deposit with impossibly high interest rates to investors across the world.

    Regulators also allege Stanford forged historical data about investments which he then used to lure more investors to his products

    Venezuela has closed all Stanford Bank
    branches and suspended transactions [AFP]
    On Thursday, Venezuela seized a local bank owned by Stanford after panicked investors withdrew millions of dollars worth of deposits.

    Ali Rodriguez, the Venezuelan finance minister, said on Thursday that Stanford Bank SA would be sold and the government would back all deposits, after at least $26.5m was withdrawn in two days.

    It is estimated that Venezuelans invested at least $2.5 billion into the Antigua-based Stanford International Bank, about a third of the money US regulators hope to recover as they pursue their fraud case against Stanford, the Associated Press reported on Thursday.

    Venezuela also closed all branches of Stanford Bank SA and said all further transactions would be suspended.

    Authorities in five Latin American nations have also taken action against Stanford businesses, with Ecuador also seizing two local branches of the group on Thursday, the Reuters news agency reported.

    Stanford, 58, is one of the most prominent businessmen in the Caribbean, with a personal fortune estimated at $2.2bn by Forbes magazine.

    The scandal follows an increase in scrutiny by investors, politicians and regulators on the returns promised and provided by investment firms, following the massive alleged $50bn fraud by Bernard Madoff, the Wall Street financier.

    SOURCE: Agencies


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