Category Archives: fraud

Did the Feds Kill the SEC’s Stanford Investigation?

There’s a tantalizing tidbit at the end of the NYT’s Stanford report today: The current S.E.C. charges stem from an inquiry opened in October 2006 after a routine exam of Stanford Group, according to Stephen J. Korotash, an associate regional … Continue reading

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Stanford: Criminal Charges Almost Certain

The SEC case against Allen Stanford comprises little more, right now, than a civil complaint; more private cases are now being filed. What does this mean for Stanford himself? Is he subject to arrest anywhere in the world? I asked … Continue reading

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Allen Stanford, Ponzi Operator

Patrick Kidd says that Allen Stanford is "another victim of the biggest economic crisis since the 1930s"; Joe Wiesenthal says that nobody is accusing Stanford of being another Ponzi scheme. So before this meme takes root, let’s be clear about … Continue reading

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Stanford: The Manhunt Begins

Given the amount of time that the SEC and the media have been sniffing around his operation, today’s fraud charges can’t have come as much surprise to Allen Stanford. And given that he owns banks in many different jurisdictions (the … Continue reading

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Millennium: A Stanford Copy-Cat

Adrienne Carter has found what looks very much to be the first — but surely not the last — of banks which won’t withstand much if any scrutiny in the wake of the Stanford collapse. Does any of this sound … Continue reading

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Stanford: How Quickly did the SEC Move?

According to the SEC press release, it has acted with lightning speed: Said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement: "We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve … Continue reading

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Highlights of the SEC Complaint Against Stanford

The SEC complaint against Stanford is quite astonishing. Here are some of the highlights, which include a slew of outright lies and even an investment with Bernie Madoff. Impossibly, Stanford’s portfolio managed to rack up identical 15.71% back-to-back returns in … Continue reading

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Stanford: The SEC Moves

The SEC has frozen all the assets of Allen Stanford and his companies, as well as those of his CFO and CIO. I think you can guess why: The SEC’s complaint, filed in federal court in Dallas, alleges that the … Continue reading

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Alex Dalmady, the MSM, and Stanford

Alex Dalmady, the analyst who broke the Stanford story, has a blog now, and he’s not afraid to use it: his latest blog entry has appeared with the headline "The WALL STREET JOURNAL can kiss my ass!": (Update: Dalmady’s entire … Continue reading

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Sunday Stanford

The Stanford story is picking up a lot of steam, to the point at which it’s becoming hard to keep up. A lot more information is coming to light about Stanford’s investments, many of which seem to be in highly-illiquid … Continue reading

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Stanford: Your Daily Dose of WTF

It took Alex Dalmady 30 minutes to work out that there was something obviously wrong at Stanford International Bank. The SEC, on the other hand, works a bit more slowly: BusinessWeek previously reported that the Securities and Exchange Commission, the … Continue reading

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Did Chanos Break the Law?

The best way of getting lots of angry comments on a blog entry is to be rude about Apple. But the second-best way is nice about short sellers. So it’s hardly surprising that after I made sympathetic noises about Jim … Continue reading

Posted in fraud, regulation | 3 Comments

Stanford: The MSM’s Caution

While it’s somewhat heartening to see the MSM pick up the Stanford story, one can’t help but be struck by the ultracautious way in which they’re doing so. The WSJ, for instance, finally gets on the case today, under the … Continue reading

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Stanford’s Self-Incriminating Memo

Memo to Allen Stanford: Be careful what you write in memos, because they leak. Bloomberg’s Alison Fitzgerald has her hands on his latest missive to employees: R. Allen Stanford, the billionaire chairman of Houston-based investment firm Stanford Group Co., said … Continue reading

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Stanford Update

The Stanford Group story is finally, slowly, making its way into the mainstream media, with BusinessWeek and Bloomberg both reporting that the group is undergoing a new SEC investigation. BusinessWeek’s Matthew Goldstein also has the news that Charlesworth A.S. Hewlett, … Continue reading

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What’s Going On at Stanford International Bank?

Ray Pellecchia and I think that if Harry Markopolos had put his theories about Bernie Madoff online, Madoff would not have been able to continue his scam much longer. Against that, a lot of people are saying that no matter … Continue reading

Posted in banking, fraud | 2 Comments

No Soup for Madoff

There’s something very compelling about Tyler’s interactive maps of Madoff victims’ addresses. One spot in particular jumped out at me: what on earth was a Madoff victim doing on Delancey Street? It turns out, tragically, that Ratner’s deli — the … Continue reading

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Markopolos vs the SEC

I’ve spent most of the morning reading Harry Markopolos’s testimony to the House committee on financial services: if you have some time, I’d highly recommend you do likewise. Markopolos isn’t shy about hyperbole: he talks at one point of his … Continue reading

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How Did Madoff Fool the SEC?

Kara Scannell has been looking at the SEC’s Madoff memos: The 2005 review and Mr. Markopolos’s report prompted the SEC to open an enforcement case, a notch more serious in the SEC’s world than the previous examination. "The staff is … Continue reading

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Fund of Funds Indemnification Clause of the Day

A prescient bit of CYA was inserted into the fund prospectus for Kingate Global, a Madoff feeder fund: Kingate warned in its fund prospectus “there was always the risk that the assets with the investment adviser could be misappropriated”. “In … Continue reading

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Madoff’s Volatility

A longtime reader of this blog got himself Bernie Madoff’s return series from a Fairfield Sentry marketing document and plugged it into an Excel spreadsheet; he then graphed the one-year rolling volatility of Madoff’s returns. The results are interesting: click … Continue reading

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Madoff Fallout Datapoint of the Day

From Robert Peston: A well-known wealthy entrepreneur told me last night that he’d lost about 1% of his net worth on an investment in Madoff and is setting about getting his money back from every hedge fund that he’s invested … Continue reading

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Bernie Madoff, Confidence Destroyer

A large number of fund-of-funds firms and other advisory shops are crowing these days about how they looked at Madoff, saw red flags, and didn’t invest. But the fact is that every fund manager who is looked at by fund-of-funds … Continue reading

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The Saddest Sentence of the Day

From Alexandra Penney, Madoff victim: I suddenly had a lot of money. I was in my late forties, and I felt that I was just too old to have it in a plain old bank account. (HT: Wiesenthal)

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Filial Affection Datapoint of the Day

Cityfile NY reports: Although the millions in Bernie’s foundation were managed by his own investment firm, neither son entrusted their charitable trusts to their dad. Mark Madoff’s $5 million account was parked at Lehman Brothers. Andrew’s $2 million trust was … Continue reading

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