SEC charges Stanford with ‘massive’ fraud

The federal government says R Allen Stanford’s investment businesses were too good to be true...

Written by Associated Press | New York | Published:February 19, 2009 12:37 am

The federal government says R Allen Stanford’s investment businesses were too good to be true,and shut his companies down on Tuesday.

Two months after Bernard Madoff was accused of running the largest investment fraud in history,Securities and Exchange Commission officials raided the offices of Stanford,a Texas billionaire,and froze the assets of three companies he controls,saying he perpetrated an $8 billion investment fraud.

Stanford was accused in civil charges of lying about the safety of investments he sold as “certificates of deposit” and promised unrealistically high rates of return. Regulators also said he faked historical data about other investments which he then used to lure in more investors for the CD products.

The fraud’s operations allegedly reached as far as the tiny Caribbean island of Antigua,where Stanford was knighted in 2006 and helped sponsor high-stakes cricket matches. As news of the charges broke Tuesday afternoon,panicked residents of Antigua swarmed a second bank controlled by Stanford hoping to take their money out,only to be turned away by guards. That bank was not part of the complaint released Tuesday.

Dozens of angry customers turned up at the main branch of the Bank of Antigua trying to get their money.

R Allen Stanford also happens to be a cricket promoter and has tie-ups with the cricket boards of England and the West Indies.

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