Stanford financial being charged with fraud
Depositors who have had dealings with Stanford Financial want fast cash in advance of the legal proceedings Allen Stanford will face. He has been charged with fraud because of $8 billion in notes he sold. Two other executives are accused as well.
Storming the banks
Hundreds of people lined up in Antigua and Caracas to take their money out of affiliated with the Texas billionaire after they heard news of the fraud charges. Stanford Financial’s headquarters are in Houston, Texas, but the financial group has banks all over the world.
The U.S. Securities and Exchange Commission has accused Stanford of operating a fraud centered on the sale of certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd., according to Reuters.
Following the revelations of the charges, Stanford’s customers were set on getting their cash fast and in advance of any trial.
Financier disappears
It seems Stanford customers are getting their cash in advance of federal agents getting Allen Stanford. At the moment, Allen Stanford’s whereabouts are unknown. He tried to hire a private jet to fly out of Houston to Antigua, but the lessor would not accept his credit card.
Far-reaching impact
Houston-based Stanford Financial is the biggest private employer in the twin-island state of Antigua and Barbuda. Prime Minister Baldwin Spencer admitted the charges against Stanford could have “catastrophic” consequences, but he urged everyone to not panic.
The Eastern Caribbean Central Bank posted a statement at Bank of Antigua saying the bank had sufficient reserves.”If individuals persist in rushing to the bank in a panic, they will precipitate the very situation that we are all trying to avoid,” the statement said.
Details of impeding charges
In a civil complaint, the SEC said SIB sold $8 billion in “by promising high return rates that exceed those available through true certificates of deposits offered by traditional banks.”
It makes sense that the customers of a potential scam artist would want to pull their cash fast, in advance of any criminal charges.
Bank runs are never good – as they cause more harm than the perceived good of getting your savings out in one piece. That said, if I banked with any of his banks, I’d want my money out in a jiffy. I know he’s gone into hiding, but I hope they find this scumbag.