HOUSTON, Texas, Fri. Sept. 24, 2010: Several former executives of the company founded by 60-year-old R. Allen Stanford could soon be in hot water with the Securities and Exchange Commission.
The SEC has reportedly notified several that fraud charges will be filed against them, Rose Romero, director of the Securities and Exchange Commission`s Fort Worth office, said.
The disclosure came during her appearance this week before the Senate Banking committee. Romero, however, did not say who would be targeted by the charges, or when they would be officially filed.
Accountants Mark Kuhrt and Gilberto Lopez, and Leroy King, head of the financial services regulatory commission in Antigua – where Stanford`s bank was based and where he was also a naturalized citizen –may be the individuals who will face charges related to the fraud.
Romero`s comments came as angry senators grilled her and top officials of the SEC on Wednesday, citing the agency`s delays in taking action against accused swindler Stanford despite repeated red flags about his financial firm`s operations.
Committee chairman Chris Dodd, D-Conn., described the situation as one in which `you had an examination office yelling `fire, fire, fire` and an enforcement branch yelling `no fire.`
Sen. Kay Bailey Hutchison, R-Texas, called the revelations `stunning` and said that she hoped something is being done to make sure such a lapse doesn`t happen again.
An inspector general`s report concluded that Fort Worth SEC officials harbored suspicions that Stanford was acting illegally as early as 1997, two years after his company`s broker-dealer arm, Stanford Group Co., registered with the SEC but did nothing.
The new charges disclosed by Romero would add to those filed against the company`s head honcho, the Texas-born, Antigua-based Stanford, his chief investment officer Laura Pendergest-Holt and James Davis, the former chief financial officer of Houston-based Stanford Financial Group. Davis pleaded guilty last month to charges including fraud while Pendergest-Holt has pleaded not guilty to allegations of fraud and conspiracy to commit money-laundering.
Stanford, the former flamboyant billionaire and cricket mogul has pleaded not guilty to 21 counts of fraud, money laundering and obstruction. He faces up to 375 years in jail if convicted. A trial date has not yet been set for him.
The scheme involved the sale of Certificates of Deposit (CDs) offering unheard-of returns.