Regulators Examining Stanford Group For Possible Fraud


Yesterday we pointed to a story that we thought could be Harry Markopolos 2.0. A guy named Alex Dalmady posted to the internet strong evidence that the Antigua/Houston-based Stanford International Bank was a fraud. Well unlike with Markopolos, regulators are actually on the case.

Bloomberg: Stanford Group Co., a Houston-based investment firm led by billionaire R. Allen Stanford, is under investigation by U.S. securities regulators over sales of certificates of deposit in its affiliated offshore bank and the consistent, above-average returns those investments pay.

Investigators from the Financial Industry Regulatory Authority visited six Stanford Group offices last month, downloaded information from computer hard drives and looked through files, people familiar with the events said. Two former Stanford financial advisers were questioned last month by the Securities and Exchange Commission, according to the people, who declined to be identified because they didn’t want to put their current jobs at risk.

If the evidence is strong and regulators don’t get tripped up by smokescreens, this could resolve itself fairly quickly. We imagine nobody at the SEC wants to be the new Megan Cheung.