Report Cites Finra Lapses in Fraud Probes

FINRAhas repeatedly denied that it had any responsibility for the Madoff Mess, claiming earlier this year that  "[n]one of the fraudulent activities that have been alleged deal with the activities of the broker-dealer or come under the jurisdiction of FINRA" according to Reuters. But today a special FINRA committee has release a report that addresses teh failure of FINRA to uncover the Stanford CD program issues, and yes, the Madoff Mess. The report states "FINRA examiners did come across several facts worthy of inquiry with the Madoff scheme that, with the benefit of hindsight, should have been pursued."
More>>>

One of the Richest Men in the US Can't Afford an Attorney

There is something wrong with this picture. Texas financier R. Allen Stanford was reported to be worth approximately 2 billion dollars before his arrest on securities fraud charges. Yesterday, the court appointed a public defender to represent him, because he cannot afford an attorney.

How is it that a billionaire does not have money to pay an attorney? The government has seized all of his assets and apparently will not release any funds for Stanford to retain counsel.

I don't have a perfect solution to this problem, but something is wrong when the government can accuse (not convict) a citizen of a crime, and seize all of his assets to that he cannot afford to have an attorney represent him. I am sure that the public defender will do as good a job as he or she can, but a public defender's office is not equipped to  defend a 7 billion dollar fraud case.

Without doing the research, it seems to me that this must be a constitutional violation here. The man has been accused of committing a crime, he has not been convicted, and no one has established that all of his assets are the proceeds of the alleged crime. How does the court justifiy the seizure of all of a defendant's assets on the filing of an accusatory instrument?
More>>>

FINRA Admits Getting Tipped Regarding Stanford

FINRA acknowledged today that  it received a tip from an employee in 2003 that the company was running a Ponzi scheme—but did not follow up. The reason for the lack of follow up is, according to testimony that Dan Sibears of FINRA will present today, is supposedly because FINRA policy is to only follow up on complaints from customers, not employees.

Sibears says that the policy was changed in March of this year.

More>>>

Amended SEC Complaint Accuses Stanford and 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 original complaint made allegations of misrepresentation regarding the CDs, and did not make allegations of a Ponzi scheme.

Amended SEC Complaint Accuses Stanford and CFO of Running Ponzi Scheme

Ten More Madoffs?

I ignored this the first two times I saw it referenced, but this rumor is gaining steam. I have no doubt that there are 10 more Ponzi schemes out there, I am working with folks involved in two more in New York alone.

But there is one bigger than Madoff? I sincerely doubt (hope?) that is not true.

FBI makes first arrest in Stanford fraud case

The FBI made the first arrest in the $8 billion Stanford Financial Group fraud investigation on Thursday, detaining chief investment officer Laura Pendergest-Holt on federal obstruction charges.

Reuters speculates that prosecutors are getting ready to charge Allen Stanford, the group's Chairman. Standford is already the subject of SEC charges accusing him of running an $8 billion dollar fraud.