We thought Bernie Madoff’s world record in Ponzi-scheming would be safe for a while, maybe for all of time. But now comes the news that the SEC is investigating one R. Allen Stanford, a billionaire who runs a money-management firm out of tropical, tax-free St. Croix. To his moneyed clients, Stanford offers certificates of deposit that offer “unusually high and consistent returns” (double the market average, according to Business Week). Hmmm, where have we heard that phrase before? Oh, also: The company overseeing the firm’s books is “a tiny accounting firm in Antigua” whose CEO recently died. Oh, dear.
Stanford manages $51 billion, just nosing out the amount that Madoff had “under management.” But before we award him the new world record, we should say: Stanford has yet to be accused of any crime, and he has said that the SEC is on a fool’s errand, acting on false tips from disgruntled ex-employees and trying to make up for its years of deficient management. The firm has 50,000 clients. We would be surprised if a few of them haven’t been making anxious inquiries as to the whereabouts of their money.
But Stanford spreads his dough around plenty. He’s a pillar of the community in the Caribbean, where he is one of the largest property owners and employers. Also, he has a corporate jet with “a toilet seat emblazoned with a golden eagle, the Stanford Financial logo.” A fine spot for the company seal!
Is Stanford Financial’s Offer Too Good to Be True? [Business Week]
Investment Firm Is Probed [WSJ]