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Depositors can't get their Cash |
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General Discussion
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Written by Leremy
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Thursday, 26 February 2009 |
AP
Billionaire's bank customers denied their deposits
Wednesday February 18, 7:09 pm ET
By Ben Fox, Associated Press Writer
Stanford depositors can't get their cash while politicians scramble and regulators urge calm
ST.
JOHN'S, Antigua (AP) -- Panicky depositors were turned away from
Stanford International Bank and some of its Latin American affiliates
Wednesday, unable to withdraw their money after U.S. regulators accused
Texas financier R. Allen Stanford of perpetrating an $8 billion fraud
against his companies' investors.
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Some
customers arrived in Antigua by private jet and were driven up the
lushly landscaped driveway of the bank's headquarters, only to be told
that all assets have been frozen pending an investigation by Antiguan
banking regulators.
"I don't know what to think. I have my life
savings here," said Reinaldo Pinto Ramos, 48, a Venezuelan software
firm owner who flew in by chartered plane from Caracas Wednesday with
five other investors to check on their accounts. "We're waiting to see
some light."
Banking regulators and politicians around the
region are scrambling to contain the damage after the U.S. Securities
and Exchange Commission filed civil fraud charges against the
billionaire on Tuesday. Regional Director Rose Romero of the SEC's Fort
Worth office called it a "fraud of shocking magnitude that has spread
its tentacles throughout the world."
Stanford, 58, is a
larger-than-life figure in the Caribbean, using his personal fortune --
estimated at $2.2 billion by Forbes magazine -- to bankroll public
works and sports teams. He also is a major player in U.S. politics,
personally donating nearly a million dollars, mostly to Democrats. At
6-foot-4 and 240 pounds, he towered over House Speaker Nancy Pelosi
while giving her a warm hug at the Democratic National Convention last
year.
He owns a home in the U.S. Virgin Islands, and operates
businesses from Houston to Miami and Switzerland to Antigua, where the
government knighted him in 2006 in recognition of his economic
influence and charity work.
U.S. regulators have accused
Stanford, two other executives and three of their companies of luring
investors with promises of "improbable and unsubstantiated" high
returns on certificates of deposit and other investments.
Many
details about the alleged fraud remain unclear, but the SEC alleges a
pattern of secrecy, including a failure to disclose the bank's exposure
to losses by in money manager Bernard Madoff's alleged Ponzi scheme.
The
SEC said no one but Stanford and James M. Davis of Baldwyn, Miss., the
Antigua-based bank's chief financial officer, know where most of the
depositors' cash is invested, and both men have failed to cooperate
with investigators. "Approximately 90 percent of SIB's claimed
investment portfolio resides in a 'black box' shielded from any
independent oversight," the SEC said in its complaint.
Stanford
wasn't talking Wednesday. A company Web site directed inquiries to the
SEC. But in an e-mail to his employees last week, the billionaire said
his company was cooperating with the probe, and vowed to "fight with
every breath to continue to uphold our good name and continue the
legacy we have built together."
A federal judge appointed a
receiver to identify and protect Stanford's assets worldwide, including
about $8 billion managed by bank, which has affiliates in Mexico,
Panama, Colombia, Ecuador, Peru and Venezuela.
Also frozen were
assets of Houston-based Stanford Capital Management and Stanford Group
Company, which has 29 brokerage offices around the U.S.
"The
fallout threatens catastrophic and immediate consequences" for the
twin-island nation of Antigua and Barbuda, said Prime Minister Baldwin
Spencer. It also could rattle the economies of smaller nations where
Stanford's companies have had outsized influence.
SEC spokesman
John Nester said the agency does not know where Stanford is. James
Sullivan, the U.S. marshal for the Virgin Islands, said agents are
monitoring his "extensive holdings" in St. Croix, including a boat he
sometimes he docks there, but could not say whether he is currently in
the territory. He does not currently face any charges requiring his
presence in court.
"As of right now, all we are doing is an
ongoing investigation to monitor his holdings, for lack of better term,
and we are not actively pursuing him," Sullivan told The Associated
Press.
Some U.S. lawmakers quickly announced they would donate his campaign contributions to charity.
The
Stanford Financial Group, through its political action committee and
employees, has contributed $2.4 million to political candidates,
parties and committees in the U.S. since 1989, with nearly two-thirds
going to Democrats, according to the Center for Responsive Politics, a
group that tracks campaign spending.
Most of that cash flowed
during the 2002 election cycle, when Congress was debating a financial
services antifraud bill that would have linked the databases of state
and federal banking, securities and insurance regulators. The bill
ultimately died in the Senate, where the biggest recipients have been
Sen. Bill Nelson, D-Fla. ($45,900); Sen. John McCain, R-Ariz.
($28,150); Sen. Chris Dodd, D-Conn. ($27,500); and Sen. John Cornyn,
R-Texas ($19,700). Rep. Pete Sessions, R-Texas also received $41,375.
Stanford
and his wife Susan also donated $931,100 of their own money, with 78
percent going to Democrats, including $4,600 to President Barack
Obama's presidential campaign last May 31. Records show $2,300 of that
was returned on the same day.
Governments across the region took
a variety of actions Wednesday to protect local investors who'd
deposited money with Stanford-linked institutions.
Colombia and
Ecuador suspended the activities of Stanford's local brokerages
Wednesday, and Panamanian regulators occupied Stanford bank branches
hit by a run on deposits, which they described as an isolated
"consequence of decisions adopted by foreign authorities." Assets at
the bank's four Panama branches, which reportedly held $200 million in
deposits at year's end, are held largely in liquid, fixed-income
investments that can more easily be converted into cash to cover
deposits if necessary, the bank said.
In Venezuela, banking
regulator Edgar Hernandez said the government was considering a request
for help from Stanford Bank SA in Caracas after a $26.5 million run on
deposits removed about 12 percent of its holdings.
"We suggested
an open intervention" by the government, including the possibility of
the government or a state-run bank depositing funds to back deposits,
Hugo Faria, one of the bank's directors, told The Associated Press.
In
Mexico, where the Stanford Fondos unit manages about $50 million for
some 3,400 clients, a note posted on a shuttered office door in the
capital's wealthy Polanco neighborhood announced that all accounts "are
temporarily frozen."
"We don't have any other information at this time, you will be contacted in the future with more details," the note said.
Karina
Klinckwort, 38, had rushed to the office Wednesday: "Everything I have
is with them, everything that my husband, may he rest in peace,
invested is with them."
The Stanford-controlled Bank of Antigua
was not named in the complaint, but many Antiguans lined up outside
nevertheless to try to get their money. Some of these working-class
depositors clutched portable radios to listen to financial news.
"People have to come to get their money," said electrician Rasta Kente.
But panicking will only make things worse, regional regulators warned.
"If
individuals persist in rushing to the bank in a panic they will
precipitate the very situation that we are all trying to avoid," said
K. Dwight Venner, governor of the Eastern Caribbean Central Bank.
Associated
Press Writers Anika Kentish in St. John's, Antigua; Jim Abrams in
Washington, D.C.; Jeff Kummer in Dallas; Frank Bajak in Bogota;
Jeanneth Valdivieso in Olga Rodriguez in Mexico City; and Fabiola
Sanchez in Caracas, Venezuela contributed to this report.
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Stock Market
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Written by Ben
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Friday, 06 February 2009 |
When a stock has fallen from a high price to a very low price, some
people think that the stock is a value buy. This is actually a value trap. The stock is likely to go lower. Be careful not to walk into this trap.
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Annoucement
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Written by Leremy
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Wednesday, 21 January 2009 |
Hello guys,
Just integrated a new chat box to the website. Now you can have your own UNIQUE ID so no one can impersonate you. Just register to the new chatbox (I hope you know how to do it).
You can also upload your picture (avatar) into it. There are many other features available in the new chat box. Feel free to explore them.
Although this chat box may load a little slower than the previous one, but feature-wise, it is a lot better. Happy chatting.
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www.leremy.com (Malaysia Web Designer) |
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Miscellaneous
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Written by Leremy
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Wednesday, 14 January 2009 |
Hello readers of TalkandShare.com.
I have just launched my new website at www.leremy.com (Malaysia Web Designer) and hopefully whoever who is interested and need a website for their company can look into it.
I have listed down the pricing and quotation of the website packages there as well, so that you will have an idea of how much would it cost to build a website.
Looking forward to work together with you if there is an opportunity. Feel free to contact me if you need any advice and consultation that is related to web. No obligation at all ;)
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Streamyx Speed is Back to Normal |
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Annoucement
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Written by Leremy
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Sunday, 11 January 2009 |
For the past one month, talkandshare.com had been very very slow. The connection speed is dreadful. We couldn't do anything because the problem occured in the underwater cable that connects Malaysia to US and Europe was damage.
But since four days ago, the connection speed suddenly become good and everything seems to go back to normal. I am sure you have experienced the same.
As for now, let's hope that the speed will maintain this way for a very long time.
Happy New Year.
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