Legal News

Bye Bye Bernie: There?s a New Legal Drama in Town

By Nathan Koppel

Associated Press

In this June 11, 2008 photo, Allen Stanford, poses for photos at the Lords Cricket Ground in London. (AP Photo/Lefteris Pitarakis, file)

Just as Bernie Madoff fatigue was threatening to set in, R. Allen Stanford has entered the picture.

The SEC has charged the Texas financier with an $8 billion fraud, alleging he promised investors high returns on certificates of deposit only to pour their money into “black box” hard-to-trade assets. Here’s a WSJ front pager on the charges.

With the ink barely dry on the SEC’s complaint, Texas lawyers George Fleming and Mike O’Brien have filed a class action in federal court on behalf of a group of investors who claim to have lost $1.75 million investing with Stanford. Here’s a report on the Stanford suit from the Texas Lawyer newspaper.

“We want to know where the investors’ money went and we’re fixing to find out,” Fleming wrote in a statement announcing the filing of the Texas suit.

Stanford has so far declined comment.

It’s a little early in the unfolding drama, but the Stanford matters appears chock full of intrigue. WSJ reports that Stanford is a fifth-generation Texas worth billions, who doles out money to politicians, sponsors a namesake professional golf tournament, and goes by “Sir Allen” in Antigua, where he was knighted in 2006.

The Houston headquarters of the Stanford companies was raided yesterday by U.S. marshals and SEC agents, who arrived in a fleet of Chevy Suburbans and GMC pickups with tinted windows.

It’s good to see that someone is still buying American cars.

Full post as published by Law Blog - WSJ.com on February 18, 2009 (boomark / email).