US securities regulators have broadened their investigation into the alleged $8bn Ponzi scheme run by Allen Stanford, the Texan billionaire, to include brokerage executives who invested their clients’ money in Stanford International Bank products.
The Securities and Exchange Commission has notified Danny Bogar, former president of Stanford International Bank’s brokerage operations, and several brokers in recent months that it intends to file civil fraud charges against them in connection with the probe, according to lawyers involved in the case and a regulatory filing. The SEC declined to comment.
The move marks an expansion of the government’s probe beyond the top officers of the bank to include the army of brokers who attracted millions of dollars from investors....
Tom Taylor, a lawyer for Mr Bogar, confirmed that his client had received a Wells notice, the process the SEC uses to notify individuals that they may face civil charges. Mr Taylor said his client had no knowledge of the alleged fraud.
Mr Taylor added that he had met SEC investigators to plead his client’s case. “He certainly wasn’t privy to what was going on [at the bank],” Mr Taylor said. Mr Bogar is a brother-in-law of Mr Davis.
Patrick Cruickshank, a broker who worked in Stanford’s Austin, Texas, office from 2006 until 2009, also received a Wells notice, according to an update to his record filed with the Financial Industry Regulatory Authority the brokerage industry’s regulator. The SEC said it planned to sue him on civil charges of securities fraud and aiding the Stanford fraud, according to the filing.
A lawyer for Mr Cruickshank said his client “has done nothing wrong” and “was a victim of the Stanford fraud”.
He would say that wouldn’t he!
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