Stanford Won’t Cooperate With SEC $8B Ponzi Probe

Stanford Won’t Cooperate With SEC $8B Ponzi Probe - 3/11/2009

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Stanford Won’t Cooperate With SEC $8B Ponzi Probe
Liz McKenzie

Securities Law 360. March 11, 2009
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EXCERPT: Billionaire banker Robert Allen Stanford is reportedly refusing to cooperate with the U.S. Securities and Exchange Commission in its ongoing investigation of an $8 billion investment fraud scheme he is accused of orchestrating. Citing his Fifth Amendment rights, Stanford said he would not incriminate himself or testify in the investigation, according to court documents obtained by the Associated Press. "I hereby ... decline to testify or provide an accounting, and will continue to decline to testify, provide an accounting or produce any documents related to the matters set forth in the commission's complaint," he said in court documents filed on Monday in the U.S. District Court for the Northern District of Texas. The SEC sued banker Stanford and three companies he controls on Feb. 16, accusing him of orchestrating a fraudulent multibillion-dollar investment scheme centering on an $8 billion certificate of deposit program. The lawsuit claims Antigua-based Stanford International Bank Ltd. and two affiliated companies sold billions of dollars worth of self-styled certificates of deposit, promising return rates exceeding those offered by most banks. The high rates were supposedly made possible because of the bank's unique investment strategy, which purportedly allowed it to achieve double-digit returns on its investments for the past 15 years. But, the SEC says, an examination revealed "strange" reports of investment performance from the bank — most notably identical reports of 15.71 percent returns in 1995 and 1996. The bank goes to great lengths to prevent any independent examination of its portfolios, the agency says, and the bank also recently refused to redeem the certificates, falsely telling at least one customer a certificate could not be redeemed because the SEC had frozen the account.

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