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SEC serves papers on Allen Stanford over alleged multi-billion fraud

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The Securities and Exchange Commission has announced that Allen Stanford, the Texan billionaire and sports sponsor who has been accused or orchestrating a multi-billon-dollar investment fr

The Securities and Exchange Commission has announced that Allen Stanford, the Texan billionaire and sports sponsor who has been accused or orchestrating a multi-billon-dollar investment fraud, has been served with court papers relating to the SEC’s civil charges.

‘At the request of the SEC, special agents of the Federal Bureau of Investigation’s Richmond Division today located and identified Stanford Financial Group chairman Allen Stanford in the Fredericksburg, Virginia, area,’ the SEC said in a statement yesterday.

‘The agents served Mr. Stanford with court orders and documents related to the SEC’s civil filing against him and three of his companies.’ The announcement ended speculation that Stanford had gone into hiding or had fled the US.

On Tuesday the US securities regulator charged Stanford and the three companies, Antiguan-based Stanford International Bank, Houston-based broker-dealer and investment adviser Stanford Group Company, and investment adviser Stanford Capital Management.

The charges allege that a scheme under which the bank offered investors high rates of interest on certificates of deposit was fraudulent, and that investor assets supposedly invested in easy-to-trade securities such as shares and bonds were in fact placed in illiquid assets such as real estate and private equity interests.

The SEC has also charged Stanford International Bank chief financial officer James Davis and Stanford Financial Group chief investment officer Laura Pendergest-Holt in the enforcement action.

The orders and documents that the FBI served on Stanford were the SEC’s complaint, a memorandum of law filed with the complaint, a court order freezing the assets of Stanford and his companies, and a court order appointing a receiver.

Reed O’Connor, a US district court judge for the Northern District of Texas, granted the SEC’s request for emergency relief for investors, and issued the orders freezing assets and appointing a receiver over R Stanford and other defendants.

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