Summary Of The Allen Stanford Case
The Allen Stanford case is one of the biggest fraud schemes in America. Allen Stanford founded Stanford International Bank in 1991 in Antigua, a small nation in the Eastern Caribbean. Stanford owned a large amount of land, was highly involved in the Antigua community and held a significant amount of power in Antigua (Ishmael 2009). In raising investment funds, Stanford targeted wealthy Latin Americans who were worried about the stability of their governments and hence the security of their wealth. This laid the foundation of his empire and he quickly became the island's largest employer. Stanford also maintained a company in Houston, called Stanford Financial Group. This company was a traditional Securities and Exchange Commission (SEC) regulated
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This new office was located midway between his Antigua bank and his Houston investment headquarters, and was close to the wealthy Latin American investors to whom he catered (Elfrink 2009). In less than a decade Stanford’s companies had assets of $3 billion. At the pinnacle, the Stanford Financial Group had clients from 140 different countries with assets of $50 billion under management. The Antigua bank held more than $8 billion in investments. Stanford’s investments were advertised as ultra safe (blue chips) investments that promised returns that were roughly three per cent higher than similar investments sold by competitors (Ibrahim 2012). These investments were advertised as being in heavily audited financial instruments (Prince 2012). The CDs were sold through a Texas investment advisor registered with the SEC, and supported by an effective sales force across the US. Stanford misrepresented the financial health of his bank and assets to investors and claimed to generate higher returns than was possible (The United States Department of Justice 2017). Stanford used the fact that he was examined, and cleared, numerous times by the SEC, to persuade any nervous investors to leave their money with him (Kotz 2014). One major company involved with Stanford was the Toronto Dominion Bank (TD). TD were a highly reputable and well regarded investment bank. TD gave Stanford access to its US accounts and the ability to trade in US dollars. TD worked with Stanford since 1991 when he first opened Stanford International Bank (Roff
This new office was located midway between his Antigua bank and his Houston investment headquarters, and was close to the wealthy Latin American investors to whom he catered (Elfrink 2009). In less than a decade Stanford’s companies had assets of $3 billion. At the pinnacle, the Stanford Financial Group had clients from 140 different countries with assets of $50 billion under management. The Antigua bank held more than $8 billion in investments. Stanford’s investments were advertised as ultra safe (blue chips) investments that promised returns that were roughly three per cent higher than similar investments sold by competitors (Ibrahim 2012). These investments were advertised as being in heavily audited financial instruments (Prince 2012). The CDs were sold through a Texas investment advisor registered with the SEC, and supported by an effective sales force across the US. Stanford misrepresented the financial health of his bank and assets to investors and claimed to generate higher returns than was possible (The United States Department of Justice 2017). Stanford used the fact that he was examined, and cleared, numerous times by the SEC, to persuade any nervous investors to leave their money with him (Kotz 2014). One major company involved with Stanford was the Toronto Dominion Bank (TD). TD were a highly reputable and well regarded investment bank. TD gave Stanford access to its US accounts and the ability to trade in US dollars. TD worked with Stanford since 1991 when he first opened Stanford International Bank (Roff