Thursday, February 26, 2009

The continuing story of CL Financial and Stanford Investment Bank: Click link and read my Newsday column

Whatever is the outcome of the current matters facing CL Financial and now Sir Allen Stanford’s investment business, the fact is that it highlights the need for much more stringent regulation of the region’s financial markets, in which trust, cash flow and liquidity are key elements. In the midst Stanford’s 20/20 series for the US$20 million prize — the largest sum ever at stake in a single sport match up – there were questions being asked about the impact of the global financial crisis on Stanford’s investment business. Seemingly in his defence, Forbes magazine (Duncan Greenburg, 6 October, 2008) painted a very favourable picture of Sir Allen, saying that “Stanford’s investment strategy can be described as sure and steady. It doesn’t compare its investment returns with any benchmark."

Then came the about spin and the spiral: on February 19, 2009, Forbes reported that the Securities and Exchange Commission (SEC) complained that Stanford and the officers of his company, “lied to CD purchasers by leading them to believe the bank re-invested their deposits primarily in liquid financial instruments, monitored those funds with a team of 20-plus analysts and subjected the portfolio to yearly audits by Antiguan regulators.”

Click link above and read more....

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