Stanford saga prompts run on banks

Customers queue outside the Stanford Group-owned Bank of Antigua in St. John's.
Politicians and banking regulators across Latin American and the Caribbean called for calm Wednesday after panicked investors pulled their money from banks owned by the Stanford Group, whose owner is accused in a multibillion dollar investment and sales fraud scheme.

“This bank does not have any problem, is a healthy financial institution,” Edgar Hernandez Behrens, Venezuela’s superintendent of banks, said of Stanford Bank Venezuela, the state-run ABN news agency reported. An estimated $2.5 billion to $3 billion has been invested in the bank, he said. The bank recorded “extraordinary withdraws” on Tuesday and Wednesday beyond what it can manage, Behrens said, according to ABN. Officials with the Venezuelan Central Bank, the banking superintendent’s office and Stanford Bank huddled on Wednesday to decide how to deal with the problem. A similar scene played out in Antigua, where customers lined up outside Stanford-owned banks to pull their money. The Securities and Exchange Commission on Tuesday charged financier R. Allen Stanford and three of his companies with orchestrating $9.2 billion in investment and sales fraud. Stanford International Bank, based in Antigua, allegedly acted through a network of Stanford Group Company financial advisers to sell approximately $8 billion of “certificates of deposit” to investors. The SEC also charged SIB chief financial officer James Davis and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group. The third company named in the complaint is investment adviser Stanford Capital Management. SIB’s Web site says its network has $51 billion in deposits and assets under management or advisement, with more than 70,000 clients in 140 countries. In September, Forbes named Stanford No. 205 in its 400 Richest Americans article, saying he was worth more than $2 billion. Stanford has reveled in the high life and sponsored high-stakes cricket matches in the Caribbean. He has citizenship in the United States and Antigua. He was knighted by the Caribbean nation and is known as Sir Allen Stanford. Stanford’s whereabouts are uncertain. CNN made repeated attempts on Wednesday to reach Stanford and his attorneys. There was no response. Some media reports have put him in Antigua, where he has a home, but that couldn’t be confirmed.