SEC probed companies, red flags copious

WASHINGTON (AP) - For years, there were red flags about Texas billionaire financier R. Allen Stanford -- so many that they could have massed into a crimson blanket.

As with the Bernard Madoff case, the scandal surrounding Stanford now seems so clear and obvious in hindsight. Yet Stanford managed to run his alleged scheme even while the Securities and Exchange Commission and other regulators had him on their radar screens and investigated his businesses.

Last week, the SEC accused Stanford in a civil lawsuit of a "massive" fraud. It said he peddled sham promises and funneled investors' money into real estate and other assets not easily turned into cash. FBI agents in Houston are running a parallel investigation.

Stanford, who was served legal papers by FBI agents last week, hasn't been charged with any crime.

The SEC began investigating Stanford's businesses in October 2006 but was asked by another, unidentified federal agency to suspend its inquiry, an SEC official in Texas told news organizations last week.

From his tiny accounting firm's office near a North London fish-and-chips shop to certificates of deposit promising outsized returns sold by a bank in Antigua, ample warning signs over the years suggested Stanford's business wasn't what it seemed.

Cornyn to make up for contributions from Stanford

Republican Texas Sen. John Cornyn said last week he'll give $4,000 to charity to make up for contributions he accepted Stanford. Cornyn was in Houston when he was asked about contributions Stanford made to his campaign and a four-day trip Cornyn and his wife took to Antigua on Stanford.

Caribbean regulators on Friday took control of a bank in Antigua that Stanford owned. The SEC has filed a civil complaint against him accusing Stanford of fraud. FBI agents tracked him down in Virginia on Thursday to serve him with court papers.
 

 

 

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