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Saturday, 21 February 2009

Criminal charges for Stanford

CHICAGO - TEXAS financier and cricket impresario Allen Stanford could soon face criminal charges if the fraud allegations laid out by securities regulators prove true, analysts said on Friday.

As Antigua joined the growing number of governments to seize Stanford banks, observers warned the global reach of the billionaire's banking operations could complicate the prosecution and the return of an estimated US$50 billion (S$75 billion) in assets belonging to an estimated 50,000 clients in 140 countries.

'While the US has many treaties in place (governing the retrieval of assets) I can see other countries like Peru wanting to protect their citizens,' said Lilly Ann Sanchez, a former prosecutor and securities enforcement officer who now works for the Florida firm Fowler White Burnett.

'Once it goes into the Texas receivership, Peru then falls in line with a bunch of other creditors.' Panicked investors who lined up outside Stanford-linked banks from Texas to Antigua this week were turned away empty handed.

With many of Stanford's operations now in receivership it could be weeks or even months before they find out if they will be able to recover their savings and access the funds.

The US receiver who has taken control of the US-based assets of the Stanford Financial Group issued a notice to investors Friday that they will not be able to withdraw funds or make payments out of their accounts 'for the foreseeable future.' 'Transfers out of these accounts are frozen until the receiver is able to verify there are no legal or equitable claims against those accounts,' Ralph Janvey wrote in a note to customers.

Meanwhile, Venezuela on Friday barred the directors of Stanford Bank Venezuela from leaving the country a day after their seized the bank and announced plans to sell its assets.

Antigua also announced plans to take over Stanford's Bank of Antigua and seize the assets of his Antigua-based offshore investment banks.

Peru, Panama, Ecuador and Colombia have also taken action against his banks and Britain has launched a probe of his actions.

The US Securities and Exchange Commission charged Stanford on Tuesday with perpetrating 'a fraud of shocking magnitude that has spread its tentacles throughout the world.' He is accused of lying to investors about the safety and real returns of eight billion dollars in 'certificates of deposits' and 1.2 billion dollars in mutual funds. -- AFP

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