SEC Busts the Next Best Thing to Bernie Madoff
After Bernie Madoff ran a $50 billion Ponzi scheme undetected, SEC regulators have been desperate to prove they haven't been sleeping on the job. Robert Allen Stanford's $8 billion CD scam is a gift.
U.S. marshals raided the Houston offices of Stanford Financial a couple of hours ago, after SEC regulators issued charges against Stanford and three other executives at the Houston-based brokerage firm. They allege that Stanford Financial sold fraudulent CDs which offered above-market rates, as high as 10 percent, issued through Stanford International Bank, an offshore subsidiary based in Antigua.
The New York Times reports:
The S.E.C. has come under fire in Congress and the media for ignoring repeated warnings over a period of years about the Bernard L. Madoff, who is accused of running a $50 billion Ponzi scheme. While investigators have been looking at Mr. Stanford and his financial empire's activities for many months, the scrutiny into the too-good-to-be-true returns on the C.D.'s increased substantially after the Madoff case.
That makes it worse, doesn't it? It shouldn't have taken a Madoff case to prompt an investigation into certificates of deposit offering 10 percent interest. It should have required a calculator.
