More Stanford Financial Group executives and financial advisers will be accused of fraud in the scheme that cost investors $7.2 billion, a Texas Securities and Exchange official told a U.S. Senate committee earlier this week.
“We have … notified several former Stanford executives that we intend to recommend fraud charges against them,” said Rose Romero, director of the SEC’s Fort Worth regional office.
“These persons include former high level executives and financial advisers.”
The Houston, Texas-based Stanford empire collapsed in the spring of 2009, when it came under investigation by the SEC. Its top executives, including CEO R. Allen Stanford, were indicted and accused of masterminding a Ponzi scheme on certificate of deposit purchasers through the the company’s Stanford International Bank Ltd. in the Caribbean.
Stanford had an office in Tupelo, and numerous Northeast Mississippi residents lost their life savings and retirement funds when the company went bust.
Some tried to sue their financial advisers, but the federal courts put their lawsuits on hold until a court-appointed receiver says they can proceed.
Whether any of the region’s Stanford managers or advisers are on the SEC’s target list isn’t known.
Jackson attorney William Ray with Watkins & Eager law firm, who represents several of the former Mississippi operations officials, said Thursday that his clients have not been notified that they are under the SEC’s scrutiny.
Romero’s remarks were made to the U.S. Senate’s Banking, Housing and Urban Affairs Committee meeting Wednesday in Washington, D.C., about the SEC’s poor oversight of and slow response to concerns about the Stanford scheme.
She said their current focus is to determine if other executives and employees at Stanford Financial Group deceived U.S. investors in the CD sales.
Former Stanford investors have said they were led to believe that their accounts were safe and protected like U.S. bank accounts through the Federal Deposit and Insurance Corp.
Stanford and others are accused of cooking the books and lying to investors about how sound the company was.
Among the defendants were Baldwyn natives James M. Davis, then chief financial officer, and Laura Pendergest-Holt, its chief investment officer.
Davis pleaded guilty and is expected to be the prosecution’s main witness when trials occur in January. Holt is free on bond and will go on trial with three others after Stanford.
Romero said the SEC has collected and reviewed tens of thousands of documents, e-mails of more than 150 former employees and taken sworn statements from more than 60 former employees and others, as well as interviewed some 200 victims of the fraud.
Contact Patsy R. Brumfield at (662) 678-1596 or firstname.lastname@example.org. The Associated Press and Houston Chronicle contributed to this report.
Patsy R. Brumfield/NEMS Daily Journal