Regulator & accountants charged in Stanford case
(CNS): Antigua’s Securities and Exchange Commission has charged two accountants who produced bogus financial statements and an Antiguan regulator who took bribes to look the other way as Robert Allen Stanford conducted an alleged $8 billion Ponzi scheme. According to an SEC release Mark Kuhrt and Gilberto Lopez, accountants for Stanford-affiliated companies and Leroy King, the administrator and chief executive officer of the Financial Services Regulatory Commission (FSRC) were charged on Friday.
Kuhrt and Gilberto allegedly fabricated financial statements to give investors the false illusion that their investments were solid, safe and secure, while King is accussed of accepting thousands of dollars per month in bribes to ignore the Stanford Ponzi scheme and supply Stanford himself with confidential information about the SEC’s investigation. King obstructed the SEC’s case since 2005, when its investigation into Stanford began.
The SEC previously charged Stanford and his companies — Antiguan-based Stanford International Bank (SIB), Houston-based broker-dealer and investment adviser Stanford Group Company (SGC), and investment adviser Stanford Capital Management — as well as SIB chief financial officer James Davis and Stanford Financial Group chief investment officer Laura Pendergest-Holt with securities fraud in an enforcement action filed in federal court in Dallas on February 17.
The SEC’s additional charges are in coordination with criminal authorities. The U.S. Department of Justice (DOJ) today simultaneously announced federal fraud charges against Stanford, Davis, Pendergast-Holt, King, Kuhrt, and Lopez. The DOJ also charged King, Kuhrt, and Lopez with conspiracy to obstruct the SEC’s investigation. The DOJ previously charged Pendergast-Holt with obstruction of justice in the SEC’s investigation.
According to the SEC’s complaint, Kuhrt and Lopez used a pre-determined return on investment number (typically provided by Stanford or Davis) to reverse-engineer the SIB’s financial statements and report investment income that the bank did not actually earn. Information in SIB’s financial statements and annual reports to investors bore no relationship to the actual performance of the bank investments.
The SEC’s complaint alleges that King facilitated the Ponzi scheme by ensuring that the FSRC conducted sham audits and examinations of SIB’s books and records. In exchange for bribes paid to him over a period of several years, King made sure that the FSRC did not examine SIB’s investment portfolio. King also provided Stanford with access to the FSRC’s confidential regulatory files on him, including the SEC’s requests for information from FSRC in its investigation. King went so far as to allow Stanford to essentially dictate the FSRC’s responses to the SEC on those information requests. King made false assurances that there was no cause for concern about Stanford International Bank. He collaborated with Stanford to withhold significant information being requested by the SEC.
The SEC’s complaint charges the defendants with violating and/or aiding and abetting violations of Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 206(1) and 206(2) of the Investment Advisers Act of 1940; and Section 7(d) of the Investment Company Act of 1940. The SEC’s action seeks permanent injunctions, financial penalties, and disgorgement of ill-gotten proceeds plus prejudgment interest.
Category: Business
11.02 I agree with most of what you have said.
But did we not roll out the Red Carpet to Kaweske? Gave him Cayman Status and only God knows what else. And we can’t revoke his status. And where is he now?
And what about the guy who owned First Cayman Bank? Look at how well the Government treated him. And where is he now?
It does not really matter what our status is with the UK,what matters most is the characters of those people who we elect as Members of Parliament and with the characters of those who we appoint to the Trade and Business Licence Board and the Cayman Status and Permanent Residency Board.
And do not jump to conclusions about Standford yet!
Maybe Biggus Maccus should just go all out and seek to legalize Ponzi schemes in the Cayman Islands. Imagine what we could do with $8 Billion, that would put us back on track in no time. Forget the lottery and casino gambling! This is the way to go!
Stanford debacle is a Good lesson for Cayman. We must be very concerned when rich business people develop cozy relationships with powerful politicians in the country. People and media in the country need to be very watchful and keep an close eye on these developing relationships. Otherwise, it would be a disaster for the country. Those who talk about independence from UK should also think about this stanford affair. Today, Antigua is getting all bad publicity in the international community and is definitely a banana republic. Luckily in Turks & Caicos islands, the UK intervined at the right time and avoided another disaster. While good international investors could bring prosperity to a country few others could bring disasters when get involved with corrupt politicians. BE WATCHFUL CAYMAN…..