The non-US victims of the R Allen Stanford fiasco are perturbed that the Securities and Exchange Commission (SEC) was au fait with the alleged fraud since 1997.
It is against this backdrop that the coalition has consequently insisted that the commission should take responsibility for the fallout.
The group, Coalicion Victimas De Stanford America Latina, in a statement on EIN Presswire, accused the SEC of being inept, negligent and complicit in its investigation of the Stanford Case.
Leader of the coalition, Jaime R Escalona said: “For the majority of the non-US victims that represent more than 84 per cent of the total depositors that believed in America’s ethical standards and the efficiency of its regulatory authorities, the Inspector General’s Report of the SEC, published on April 16, 2010, is shameful and devastating.
“Since 1997, the office of the SEC in Fort Worth knew that R Allen Stanford was presumably running a pyramidal fraud,” the coalition leader added.
Questioning this perceived incompetence on the part of the regulatory body, Escalona rhetorically asked if it’s not considered inept when a crime is being committed and there is no action on the part of the authorities.
The news site added that the SEC’s inspector general said that the “examiners of the SEC in Fort Worth could never convince the SEC’s Enforcement Division to open an investigation that could have stopped the sale of CDs (Certificate Deposits) in time, and in consequence could have prevented this social catastrophe.”
According to the news item, the inspector general said the chief of enforcement at the time, Spencer Barasch, adamantly refused to investigate Stanford and even closed inquiries that other officials had started.
Responding to reports that Barasch, after leaving the SEC in 2005, tried three times to be Stanford’s legal representative before the SEC and was actually able to represent him during three months in 2006, Escalona queried the implications of Barasch’s move.
“How much did this complicity cost the victims?” he asked. “Why did the SEC not have the valor to stop the immoral behaviour of this government official?”
It is reported that the Stanford Case was a “difficult” one, which warranted a lengthy investigation. Apparently, the directors of the SEC’s Forth Worth office were evaluated on the number of cases that they were investigating and they were aware that they were under scrutiny.
Consequently, “novel or complex” cases were closed, notwithstanding the consequences.
As is expected, this did not go down well with Escalona, who deduced that discrimination may have played a role in the actions, or lack thereof, by the SEC.
“The saddest thing was to learn that the SEC did not give priority to the Stanford Case because in addition to being a complex case and difficult to investigate, the majority of the investors were foreigners,” he posited. “… Is this a case of negligence or discrimination?”