Suspicions are swirling, though none founded yet, that R. Allen Stanford and his offshore Antigua based Stanford International Bank could be the next Bernie Madoff. The bank has been consistently offering well to do investors guaranteed returns on certificates of deposit that are double the U.S. average. Unlike a traditional bank which would derive returns from a performing loan portfolio and other bank operations, Stanford's interest has been paid for by activities involving stock, bond, and hedge fund investments. Even last year, the worst in the markets since the Great Depression, investors were rewarded with a handsome if somewhat unbelievable 6% return, according to reports. Stanford's CDs have 30,000 holders with assets of $8.5 Billion. The entire bank claims assets of $51 Billion, or $1 Billion more than Madoff allegedly had at his disposal. Furthering suspicion is that Stanford is listed as a holder of a handful of companies that trade on the "pink sheets", a thinly traded, less regulated market that is ripe for shadiness. The firm is now being investigated by the SEC, FINRA, and the FBI. While there is no proof of wrongdoing, and most of the information available is from 3rd party sources that cannot necessarily be confirmed (like some contained in this piece), it sure sounds familiar. This is a story to watch.
Stanford International Curtailed Funding Amid Probe (WSJ)
The Next Bernie Madoff: R. Allen Stanford Under Investigation By SEC, FBI, FINRA (Huffington Post)
Antigua Regulator To Quiz Stanford (Reuters)
Stanford, Flamboyant Texan, Faces Media Glare (Washington Post)