Amended SEC Complaint Accuses Stanford, CFO of Running Ponzi Scheme
The Securities and Exchange Commission has filed an amended complaint against R. Allen Stanford that alleges the Texas billionaire ran a huge Ponzi scheme and took at least $1.6 billion of investor money in personal loans.
The amended complaint also accuses James Davis, the chief financial officer of Stanford’s company, of participating in the Ponzi scheme, the Wall Street Journal reports (sub. req.).
The original SEC complaint accuses Stanford, Davis and the company’s top investment officer, Laura Pendergest-Holt, of defrauding investors in bank certificates of deposit at an Antigua affiliate out of $8 billion by promising improbable returns and claiming wrongly that the money was in safe investments.
Pendergest-Holt was arrested last week and charged with obstructing justice by misleading the SEC in its investigation of the Antigua bank. She was released Friday on $300,000 bond and required to wear an electronic surveillance device, according to the Wall Street Journal story.
The complaint says Stanford and Davis came up with a figure for investor returns each month at the Antigua bank and asked internal accountants to draft financial statements to match, the story says. Pendergest-Holt facilitated the scheme, the complaint claims, by telling investors she managed the Antigua bank’s assets.
