Stanford Financial Group
Company type | Privately owned |
---|---|
Industry | Global financial services |
Genre | Global financial services |
Founder | Robert Allen Stanford |
Defunct | February 17, 2009 |
Fate | Placed in receivership on allegations that this company was a Ponzi scheme |
Headquarters | Houston, Texas, United States |
Key people | Robert Allen Stanford, chairman and CEO Laura Pendergest-Holt, chief investment officer James Davis, CFO |
Services | Wealth management |
Owner | Robert Allen Stanford |
Divisions | Stanford Capital Management Stanford Group Company Stanford International Bank Ltd |
The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by American authorities in early 2009. Headquartered at 5050 Westheimer in Uptown Houston, Texas, it had 50 offices in several countries, mainly in the Americas, included the Stanford International Bank, and was said to have managed US$8.5 billion of assets for more than 30,000 clients in 136 countries on six continents.[1][2] On February 17, 2009, U.S. Federal agents placed the company into receivership due to charges of fraud.[3][4] Ten days later, the U.S. Securities and Exchange Commission amended its complaint to accuse Stanford of turning the company into a "massive Ponzi scheme".[5]
History
Allen Stanford traced his company to the insurance company founded in 1932 in
In 2008, Stanford Financial Group announced it would open a new global management complex in
The company was bound by a web of personal and family ties. Stanford's chief financial officer and second-in-command, James M. Davis, was his roommate at Baylor University. The chief investment officer, Laura Pendergest-Holt, grew up attending a church in Baldwyn, Mississippi, where Davis was a Sunday school teacher. Many top officials were related to each other. This led former employees to claim the company was fraught with nepotism; former executive Charles Satterfield told Bloomberg News that whenever someone asked questions, a common response was "I'm not going to question my brother-in-law."[10]
Affiliated companies
Stanford Financial Group comprised several affiliated companies:
- Stanford Financial Group Company (SFGC) was an entity based in Houston, Texas, USA, that provided financial services to several of the affiliated companies, and in particular to Stanford International Bank Limited (SIBL). The services were provided via a "Services Agreement" that paved the way for investor deposits to be funneled via a circuitous route to multiple destinations, including affiliated companies that leased multiple corporate jets, owned yachts, funded a cricket pitch and even a Swiss bank account used to bribe officials.[11]
- Stanford Capital Management, investment adviser, based on Houston[1]
- Stanford Group Company, broker-dealer, based in Houston
- Stanford International Bank, was started in 1986 in Montserrat where it was called Guardian International Bank. Allen Stanford relocated its operations to Antigua.[12] On February 19, 2009, Nigel Hamilton-Smith and Peter Wastell of the British accounting firm Vantis were appointed joint receivers of the bank,[13] and were made liquidators on April 15, 2009.[14] In June 2010, the High Court of Antigua resolved that Vantis should be removed from its responsibilities. The firm, which had recently received government approval to sell the property assets, appealed the decision.[15]
- Stanford Trust Company, helped manage and protect wealth.[16][17] Vantis was also appointed receivers of Stanford Trust Company.[18]
- Bank of Antigua
- Stanford Coins and Bullion
Sponsorships and charity
In 2007, Stanford Financial Group assumed title sponsorship of the
Stanford Financial Group was the lead financier for the 2007 film The Ultimate Gift,.[20][21] According to the Association for Healthcare Philanthropy, the story of The Ultimate Gift promoted philanthropy in not-for-profit health care institutions.[20]
The group established a significant presence in
.The
As one of the founding partners, Stanford Financial Group was also involved in
Investigation and receivership
During the week of February 13, 2009, Stanford issued a letter to clients saying: "Regulatory officers have visited our offices and have stated that these are routine examinations".
The
On February 18 and 19, 2009, Ecuador and Peru suspended the operations of local Stanford units, and, in Venezuela and Panama, the governments seized local units of Stanford Bank.[29] Mexico's financial regulators announced on February 19 that it was investigating the local affiliate of Stanford bank for possible violation of banking laws.[29]
On February 27, 2009, Stanford official Laura Pendergest-Holt was arrested by Federal agents in connection with the alleged fraud.[30] On that day the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme", misappropriated billions of dollars of investors' money and falsified the Stanford International Bank's records to hide their fraud. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said.[5][31]
United States District Judge David Godbey froze all of the Stanford personal and corporate assets. Godbey gave them to Ralph Janvey, a Dallas receiver; Janvey will retain control until the SEC suit is resolved.[32] A British receiver took the Antigua-based Stanford International Bank.[33]
On July 1, 2009, James M. Davis, the CFO of the company, agreed to change course from his not guilty plea and plead guilty to three charges related to the Ponzi scheme fraud, once details can be worked out.
On November 13, 2009, the US District Court ordered brokerage accounts to be transferred to
In 2011, an auction of Stanford's goods was held in Houston.[35]
Headquarters
Stanford was headquartered in the
On May 18, 2010, the receiver entered into a
Third-party settlements
On March 19, 2012, the 5th U.S. Circuit Court of Appeals overturned a federal judge's ruling from the previous year that threw out three class action lawsuits that are trying to use state laws to recover investor losses resulting from Stanford's scheme. The ruling allows lawsuits by investors who lost millions in the Stanford Ponzi scheme to go forward against several third parties.[44]
In February 2023,
See also
- Bernie Madoff
- Sholam Weiss
- 2007–2012 global financial crisis
- Scott Rothstein
- Tom Petters
- White-collar crime
- List of investors in Bernard L. Madoff Securities
References
- ^ a b c d "Stanford Financial charged with 'massive' fraud". msnbc.msn.com. Archived from the original on 2009-02-19. Retrieved 2009-02-17.
- ^ "Contact Us > North America." Stanford Financial Group. Retrieved on February 18, 2009.
- ^ a b Krauss, Clifford; Phillip L. Zweig; Julie Creswell (February 18, 2009). "U.S. Accuses Texas Financial Firm of $8 Billion Fraud". The New York Times. Retrieved 2009-02-17.
- ^ See generally, Securities and Exchange Commission, Plaintiff v. Stanford International Bank Ltd., Stanford Group Company, Stanford Capital Management LLC, R. Allen Stanford, James M. Davis, Laura Pendergest-Holt, Defendants, case no. 3:09-cv-00298-L; U.S. District Court for the Northern District of Texas (Dallas).
- ^ a b Driver, Anna (27 February 2009). "U.S. charges Stanford with massive Ponzi scheme". Reuters. Thomson Reuters. Retrieved 28 February 2009.
- ^ "Company history". stanfordfinancial.com. Retrieved 2009-02-17.
- ^ a b c Hays, Kristen; Mary Flood (February 13, 2009). "Billionaire downplays scrutiny of Stanford Financial". Houston Chronicle. Retrieved 2009-02-17.
- ^ Kidd, Patrick (February 18, 2009). "Profile: Behind Allen Stanford's easy charm there is the glint of steel". London: timesonline.co.uk. Retrieved 2009-02-17.
- ^ Group, Stanford Financial. "Stanford Financial Group To Expand in the Caribbean". www.prnewswire.com. Retrieved 2017-01-10.
- ^ Forsythe, Michael; Fitzgerald, Alison (2009-03-09). "Stanford Prayer With Dying Man Pumped Agents in Alleged Fraud". Bloomberg News.
- ^ "Janvey v. Maldonado Case 3:14-cv-02826 doc 103". Retrieved 2015-10-09.
- ^ Goldstein, Matthew. "Stanford's Failed Health Club". businessweek.com. Archived from the original on February 17, 2009. Retrieved 2009-02-17.
- ^ Financial Services Regulatory Commission, Antigua and Barbuda. News Archive. Retrieved 2010-06-09.
- ^ Stanford International Bank Limited Placed into Liquidation, BusinessWire, 16 April 2009. Retrieved 2010-06-09.
- ^ Antigua court wants to remove Vantis from Stanford liquidation Archived 2010-08-20 at the Wayback Machine, Accountancy Age, 11 June 2010. Retrieved 2010-06-11.
- ^ "ABOUT STANFORD TRUST COMPANY". stanfordtrustco.com. Archived from the original on 2009-01-09. Retrieved 2009-02-17.
- ^ Fitzgerald, Alison (February 12, 2009). "Billionaire Stanford's Firm Said to Face U.S. Probe (Update1)". bloomberg.com. Retrieved 2009-02-17.
- ^ "Stanford bank in Antigua seized." BBC. February 21, 2009. Retrieved on July 27, 2009.
- ^ Stanford Name Removed from PGA Stop Yahoo Sports, March 20, 2009
- ^ a b "AHP and The Ultimate Gift Experience". ahp.org. Archived from the original on October 4, 2006. Retrieved 2009-02-17.
- ^ "The Ultimate Gift". Box Office Mojo. Retrieved 2007-05-25.
- ^ "Stanford Financial Group further expands profile in Golf as new title sponsor of LPGA Tour Championship". lpga.com. Retrieved 2009-02-17.
- ^ Robbins, Kevin (February 17, 2009). "Feds to Stanford: You're OB". Austin American-Statesman. Retrieved 2009-02-17.
- ^ "Feds Raid Stanford Financial Group Offices". WHBQ. February 17, 2009. Archived from the original on February 23, 2009. Retrieved 2009-02-17.
- ^ Driver, Anna (February 17, 2009). "U.S. agents enter Stanford Financial Houston office". reuters.com. Retrieved 2009-02-17.
- ^ Greenberg, Duncan (February 17, 2009). "Billionaire Stanford Charged With Fraud". forbes.com. Retrieved 2009-02-17.
- ^ Goldfarb, Zachary A. (February 17, 2009). "SEC Charges Stanford Financial in $8B Fraud". washingtonpost.com. Retrieved 2009-02-17.
- ^ Fitzgerald, Alison (February 17, 2009). "Stanford International Bank Said to Bar Withdrawals Amid Probe". bloomberg.com. Retrieved 2009-02-17.
- ^ a b Ana Isabel Martinez; Jason Szep (February 19, 2009). "Stanford probe widens, Venezuela seizes bank". Reuters.
- ^ Jagger, Suzy (February 27, 2009). "Top Stanford official Laura Pendergest-Holt charged with obstruction". The Times. London. Retrieved May 24, 2010.
- Wall Street Journal, February 27, 2009
- ^ "Stanford criticizes receiver fees as ‘unbridled’." Bloomberg News at Houston Chronicle. June 5, 2009. Retrieved on June 22, 2009.
- ^ Sweeney, John. "Stanford drug informer role claim." BBC. Saturday May 9, 2009. Retrieved on June 22, 2009.
- ^ Stanford Financial Group Receivership http://stanfordfinancialreceivership.com/
- ^ "Ex-financier Stanford's effects face Texas auction." Associated Press at the Houston Chronicle. June 2, 2011. Retrieved on June 3, 2011.
- ^ "Tower 2 Archived 2009-06-01 at the Wayback Machine." Galleria Office Towers. Retrieved on February 22, 2009.
- ^ "Uptown District Map Archived 2009-05-08 at the Wayback Machine." Uptown Houston District. Retrieved on January 30, 2009.
- ^ "Contact." Stanford Financial Group. January 27, 2006. Retrieved on June 22, 2009.
- ^ Houston Business Journal. Friday July 2, 2010. Retrieved on August 25, 2010.
- ^ "Contact." Stanford Financial Group. January 24, 2007. Retrieved on June 22, 2009.
- ^ "Notice of Public Auction for Sale of 5050 Westheimer, Houston, Texas." Stanford Financial Receivership. Retrieved on August 25, 2010.
- ^ a b "NOTICE OF PUBLIC AUCTION OF REAL PROPERTY IN HARRIS COUNTY, TEXAS." Stanford Financial Receivership. Retrieved on August 25, 2010.
- Houston Business Journal. Monday August 23, 2010. Retrieved on August 25, 2010.
- ^ "Court allows lawsuits by investors who lost millions in Stanford ponzi scheme to go forward". Washington Post. 2012-03-19.[dead link]
- ISSN 0362-4331. Retrieved 2023-02-28.
Further reading
- "SEC Charges R. Allen Stanford, Stanford International Bank for Multi-Billion Dollar Investment Scheme". U.S. Securities and Exchange Commission. 2009-02-17.
- "SEC Statement on the Case Against R. Allen Stanford". U.S. Securities and Exchange Commission. 2009-02-19.
- "SEC Case Against R. Allen Stanford". U.S. Securities and Exchange Commission. 2011-06-01.
External links
- Stanford Financial Group Receivership
- Stanford Financial Group at the Wayback Machine (archive index)
- Stanford International Bank Ltd. at the Wayback Machine (archive index)
- Stanford Watch at Houston Chronicle