mail@shareholdersfoundation.com
On Thursday an investor with Stanford International Bank Ltd. filed a second class action lawsuit was filed in the United States District Court for the Southern District of Texas on behalf of purchasers of Stanford International Bank Ltd. certificates of deposit or shares in Stanford International Bank Ltd.’s Stanford Allocation Strategy proprietary mutual fund wrap program between February 19, 2004 and February 17, 2009.
If you invested with Stanford International Bank in certificates of deposit or shares in SIB’s Stanford Allocation Strategy proprietary mutual fund wrap program (“SAS”) between February 19, 2004 and February 17, 2009 you have certain options and there are short and strict deadlines running (DEADLINE: April 17, 2009). You should contact the Shareholders Foundation, Inc immediately!
Email: mail@shareholdersfoundation.com
Or call us today: +1 (858) 779 – 1554
According to the complaint the plaintiff accuses that Stanford International Bank Ltd. (“SIB”), its affiliated investment advisors and certain of its officers and directors violated the Securities Exchange Act of 1934. The complaint alleges that between February 19, 2004 and February 17, 2009SIB and its affiliated investment advisors, Stanford Group Company (“SGC”) and Stanford Capital Management, LLC (“SCM”), fraudulently sold certificates of deposit (“CDs”) that promised rates of return far above those available from other banks. Defendants claimed that these superior returns were possible because SIB invested its deposits rather than loaning them and to ensure that depositors could redeem their CDs, defendants assured them that SIB’s investments were liquid and diversified, so the lawsuit. But the plaintiff alleges that in fact, nearly 80% of SIB’s investments were concentrated in just two high-risk, illiquid categories: private equity and real estate. The complaint also alleges that defendants misled investors in SIB’s SAS program. Specifically, defendants picked a handful of mutual funds that had performed extremely well in 1999-2004 and claimed the returns of those high-performing funds as the historical returns of the SAS program. The plaintiff accuses that the defendants also inflated the claimed returns of the SAS program in 2006 and 2007. Investors, misled by defendants’ claims of historic returns, have fared very poorly in the SAS program. In addition, according to the complaint, when investors became concerned that SIB might have invested in Bernard Madoff’s $50 billion Ponzi scheme, SIB sent them each a letter stating that “Stanford International Bank did not have any exposure to the Madoff Fund.” But an SIB analyst informed all three of the individual defendants, including R. Allen Stanford (“Stanford”)
The U.S. Securities and Exchange Commission (“SEC”) filed charges on Tuesday with carrying out a "massive, ongoing fraud" involving the sale of $8 billion in CDs. The SEC said in the complaint that R. Allen Stanford and two colleagues allegedly lied to customers about how their money was being invested and how the firms' investment portfolios had performed in the past. CDs are popular savings products, promising fixed-returns to investors, who usually agree to deposit their money for a set period of time. On its Web site, Stanford says the product, known as Stanford Allocation Strategies, aims to "reduce volatility throughout the investment cycle." The SEC said that Stanford International Bank, working through a network of Stanford Group advisers, promised "improbable, if not impossible" returns to investors, often many percentage points higher than what rivals offered. The firms told customers their deposits were safe, invested in easily sellable securities, while in fact, so the SEC, the funds were invested in real estate and private equity holdings. The SEC alleges that the firms also falsely told customers that investments were monitored by more than 20 research analysts and subject to yearly audits by Antiguan regulators, while most of the investments were actually managed only by Allen Stanford and Davis. More recently, the firms falsely told customers that its funds had no exposure to the Madoff case, the SEC said, when executives knew of $400,000 tied to Madoff and the bank told clients its investment portfolio lost just 1.3 percent in 2008, although the Standard & Poor's 500 plummeted 39 percent. 'Stanford International Bank goes to great lengths to prevent any true independent examination of those portfolios,' the SEC's complaint states.
In addition to Stanford, the SEC complaint charged Antigua-based Stanford International Bank and two affiliates in Houston, Stanford Group and Stanford Capital Management. Also charged were executives James M. Davis, Stanford International Bank's chief financial officer, and Laura Pendergast-Holt, chief investment officer of Stanford Financial Group. Stanford, which says it has more than 30,000 investors and $8.5 billion in assets, has not cooperated with investigators, so the SEC, which asked a federal judge in North Texas to freeze the defendants' assets. 'Contrary to recent public statement by Stanford International Bank, Stanford and Davis have wholly failed to cooperate with the commission's efforts to account for the $8 billion of investor funds purportedly held by Stanford International Bank.'
About 90 percent of this portfolio is in a 'black box' that is shielded from independent oversight, according to the complaint. The U.S. District Judge Reed O'Connor entered the temporary restraining order, froze the defendants' assets and appointed a receiver to marshal the assets, according to the SEC. Also federal authorities reportedly entered the firm's office buildings in Houston According to an the eyewitness about 15 people, some wearing jackets identifying them as U.S. marshals, entered the lobby of Stanford's office in the Houston Galleria area.
The SEC also alleged that Stanford Group used false and misleading historical performance data to lure more than $1 billion in investments into a mutual fund investment program. Meanwhile depositors from as far away as Colombia have reportedly begun arriving in the island nation of Antigua, seeking to withdraw their money from an offshore bank under investigation by U.S. state and federal authorities. Mr. Stanford reportedly said in a conference call to employees Tuesday there would be a temporary moratorium of two months on early redemptions for CDs, according to one Stanford financial adviser who has worked at the firm for about five years.
A customer in Houston, who said he has more than $2 million in Stanford CDs, said a representative told him on Feb. 11 that he'd have to wait until the maturity date to get his money back. John Painter, who reportedly invested $10 million with Stanford, said "You put your money in an institution and think everything is fine and then you find out that it isn't fine. That's not good".
If you invested with Stanford International Bank in certificates of deposit or shares in SIB’s Stanford Allocation Strategy proprietary mutual fund wrap program between February 19, 2004 and February 17, 2009 you have certain options and there are short and strict deadlines running (DEADLINE: April 17, 2009). You should contact the Shareholders Foundation, Inc immediately!
Email: mail@shareholdersfoundation.com
Or call us today: +1 (858) 779 – 1554
or send us your information by mail / facsimile:
Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
Tel:+1-(858)-
Fax:+1-(858)-
mail@shareholdersfoundation.com
www.ShareholdersFoundation.com
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