Billionaire Stanford’s Firm Said to Face U.S. Probe of CD Sales
“Feb. 12 [Bloomberg] — Stanford Group Co., a Houston-based investment firm led by billionaire R. Allen Stanford, is under investigation by U.S. securities regulators over sales of certificates of deposit in its affiliated offshore bank and the consistent, above-average returns those investments pay.
“Investigators from the Financial Industry Regulatory Authority visited six Stanford Group offices last month, downloaded information from computer hard drives and looked through files, people familiar with the events said. Two former Stanford financial advisers were questioned last month by the Securities and Exchange Commission, according to the people, who declined to be identified because they didn’t want to put their current jobs at risk.”
“Four former investment advisers interviewed by Bloomberg said the Stanford Group offers incentives for those who steer their clients’ money into the bank CDs. The company paid a 1 percent fee to the advisers, held contests and offered trips and bonuses of up to $125,000, based on how much money went into Stanford International Bank, according to the former employees and e-mails provided to Bloomberg News. Those incentives weren’t paid for investments in other securities, they said.”
The subprime brokerages (Fremont, New Century, R.I.P.) also paid big commissions (yield spread premiums), held contests, and paid for big company-wide fiestas to “reward” their biggest “producers.” Did any CEO ever bother to ask if they broke any laws, or committed any ethical violation?
Madoff et al paid fees to “investement advisers” (funds of funds) to steer money their way. Investment advisers apparently did very little vetting, yet collected fees from Madoff AND their victims (double dipping).
More cockroaches caught not wearing swimming trunks whilst playing musical deck chairs on the Titanic in the house that Ponzi built?
We shall see.
“Tax evasion can be punishable by death in China, while in the US it qualifies you for the office of Treasury Secretary.”