The NASD, the SEC and the DOJ did not disclose critical information
June 16, 2009
The NASD was a self-regulatory organization of the securities industry responsible for the operation
and regulation of the Nasdaq stock market and over-the-counter markets.
The NASD watches over the Nasdaq to make sure the market operates correctly. In 2007, the NASD merged
with the New York Stock Exchange's regulation committee to form the Financial Industry Regulatory
Authority, or FINRA.
The NASD, the SEC and the DOJ received numerous reports of the fraud being carried on by Stanford Group over
the past decade and the least they could have done was disclose that information so investors could
make an informed decision.
September 1, 2003
NASD Complaint Center
1735 K Street NW
Washington, D.C. 20000-1500
RE: Stanford Financial Group
Case of Corporate Fraud
Since business scandals like those of ENRON and WORLDCOM became public, it is the duty of all Americans to
speak up and denounce any wrongdoing of Corporate America for the sake of justice to many impoverished
innocent people. This letter discloses another possible case of "Corporate Fraud" being perpetuated by the
Stanford Financial Group and its owner, banking and real estate mogul Mr. Allen Stanford.
Stanford Financial is the subject of a lingering Corporate Fraud Scandal perpetuated as a "Massive Ponzi
Scheme" that will destroy the life savings of many, damage the reputation of all associated parties,
ridicule Securities and Banking authorities, and shame the United States of America.
The Stanford Financial Group of Houston, Texas has been selling to people of the United States and of Latin
America, offshore certificates of deposit issued by Stanford International Bank, a wholly owned unregulated
subsidiary. With the mask of a regulated US Corporation and by association with Wall Street giant Bear
Stearns, investors are led to believe these CD's are absolutely safe investments. Notwithstanding this
promise, investor proceeds are being directed into speculative investments like stocks, options, futures,
currencies, real estate, and unsecured loans.
For the past seventeen years or so, Stanford International Bank has reported to clients in perfect format
and beautifully printed material of the highest quality, consistent high returns on the bank's portfolio,
with never a down year, regardless of the volatile nature of the investments. By showing these unbelievable
returns, Stanford has justified the expense spent on luxury, lavish styles of management, high bonuses, and
generous contributions to all sorts of causes.
The questionable activities of the bank have been covered up by an apparent clean operation of a US
Broker-Dealer affiliate with offices in Houston, Miami, and other cities that clears through Bear Stearns
Securities Corporation. Registered representatives of the firm, as well as many unregistered
representatives that office within the B-D, are unreasonably pressured into selling the CD's. Solicitation
of these high risk offshore securities occurs from the United States and investors are misled about the
true nature of the securities.
The offshore bank has never been audited by a large reputable accounting firm, and Stanford has never shown
verifiable portfolio appraisals. The banks portfolio is invested primarily in high risk securities, which
is not congruent with the nature of safe CD investments promised to clients.
For reference purposes, attached are copies of financial statements of the bank for the years 2000 and 2001
taken from the annual reports. These reports indicate some very untimely investments decisions, extremely
high risk profiles, elevated expenses, and no disclosure about the investment portfolio.
Stanford has been in the past the subject of numerous investigations and press articles that have focused
on the dubious activities and deals of Mr. Allen Stanford, who recently became a citizen of Antigua. These
investigations have focused on issues like, bribery of the Government of Antigua, illegal selling of
offshore securities and money laundering, but have missed the point of truly unveiling the value of the
bank's portfolio, which has been covered up by the bank's non-jurisdictional nature. Unbelievable returns
of the portfolio, non verifiable portfolio appraisals, non prudent investment strategies, information from
insiders, and lavish expense management styles, suggest the portfolio is deeply underwater. If true,
returns and expenses are being paid out of clients' monies and by the size of the portfolio, this would be
one of the largest Ponzi Schemes ever discovered.
This letter is being written by an insider who does not wish to remain silent, but also fears for his own
personal safety and that of his family. The issue is being referred for investigations to the proper
authorities, related parties, and persons whose mission is to inform the general public. The key point
to focus on is the real market value of Stanford International Bank's investment portfolio, which is
believed to be significantly below the bank's obligations to clients. Overlooking these issues and not
thoroughly investigating them is becoming an accomplice to any wrongdoing.
Sincerely yours,
INSIDER
Cc: Bear Stearns Securities Corporation
The Securities and Exchange Commission
The US Senate Committee
The Office of the Comptroller of the Currency
The National Association of Securities Dealers
The Wall Street Journal
The Miami Herald
The Washington Post
Source: NASD Complaint Center - Case of Corporate Fraud.
U.S. Department of Justice
Criminal Division
September 9, 2004
Mr. Conrad A. Airall
Attorney at Law
7 North Bloodworth Street
Raleigh, NC 27601
Dear Mr. Airall:
This is in response to correspondence dated February 10, 2004, sent to the Department of Justice on your
behalf from Congressman Bob Etheridge regarding your concerns over possible violations of the Foreign
Corrupt Practices Act by a U.S. businessman doing business in Antigua and Barbados. Congressman Etheridge
has asked the Department of Justice to respond directly to you. We apologize for not responding sooner to
your inquiry.
We appreciate you having brought these allegations to our attention and will take appropriate investigative
steps in connection with this matter.
Thanks you for your inquiry. Please do not hesitate to contact us if the Department of Justice can be of
assistance in the future.
Sincerely,
Christopher A. Wray
Assistant Attorney General
Source: DOJ - Criminal Division.
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