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Last updated: 19 February, 2009 - Published 17:16 GMT
 
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The Allen Stanford saga
 
Allen Stanford
Antigua-based Texan billionaire Allen Stanford is facing fraud charges in the US
Pressure is mounting on banks associated with the Antigua-based Texan financier, Allen Stanford.

Mr Stanford, a naturalised Antiguan who has been knighted by the country, is being investigated by the United States Securities and Exchange Commission (SEC) for alleged fraudulent activities by one of his financial institutions.

Peru and Venezuela have become the latest countries to intervene in local banks controlled by the Stanford group as it faces fraud accusations.

Peru's securities regulator suspended local operations of the Stanford Financial Group for 30 days.

It follows action by Panama and Ecuador after billionaire Sir Allen Stanford was accused in connection with an $8bn (5.6bn) investment fraud.

Antiguan and Eastern Caribbean financial regulators have insisted that his Bank of Antigua had sufficient reserves.

Mr Stanford’s commercial bank in Antigua is regulated by the St Kitts-headquartered Eastern Caribbean Central Bank.

 The fall-out threatens catastrophic consequences
 
Baldwin Spencer, Antiguan prime minister

In a speech to the nation, Prime Minister Baldwin Spencer of Antigua and Barbuda spoke of the damaging effects the scandal could have on the country if the charges are proved correct:

No need for panic

While stating that “this is not a looming crisis,” he however warned that “the fall-out threatens catastrophic and immediate consequences”.

But Mr Spencer also sought to calm doubtful depositors and others.

Baldwin Spencer
PM Spencer: No need for panic

He announced that his government and the Eastern Caribbean Central bank were putting contingency plans in place, although he did not specify what those plans entailed.

“There is no need for panic”, he declared.

Opinion seems divided among clients of Allen Stanford's Bank of Antigua.

Some people felt their money was safe there, but others were not so sure.

Mr Spencer also appealed for national unity on this issue when he said: “If there ever was a reason and a time for the Antiguan and Barbudan people to pull together in solidarity, that time is now.”

It was just this week that he announced the date for general elections on 12 March in what has already been a heated and acrimonious campaign mainly between his ruling United Progressive Party(UPP) and the opposition Antigua Labour Party(ALP).

The Stanford affair is expected to figure prominently in the campaign.

It won’t be the first time that Allen Stanford’s presence and influence in Antigua has featured on the island's political/election agenda.

The Stanford scandal comes at delicate time for Antigua as the country is in full campaign mode for the March 12 general election.

This issue is expected to become a central one for the campaign, and already the opposition Antigua Labour Party leader has spoken out against the government's attitude towards Mr Stanford.

lester bird
Sir Allen's entry into Antigua came during the rule of Lester Bird's ALP

It was the ALP, while in office, which had facilitated the Texan billionaire's presence in Antigua.

BBC Caribbean asked the party's leader, Lester Bird, whether they'll able to resist trying to score political points from this saga.

The ruling UPP has had its run-ins with Sir Allen who has extensive business interests in Antigua.

His companies, which include the bank and tourism properties, are major employers there.

Up until recently he ran two airlines, Caribbean Star and Caribbean Sun, which operated out of Antigua, but which he shut down last year.

Mr Stanford has also been a major supporter of sports in Antigua (and the region) through his multi-million dollar winner-take-all Stanford Twenty20 cricket tournaments.

Stanford twenty20 logo
Allen Stanford has been a major cricket sponsor

John Fuller is an attorney, in Antigua, who has known Sir Allen for ten years, and has represented one of his companies.

He spoke to the BBC's Eddie Mair about the man he knew and the trouble he's in.

In the United States Virgin Islands, another territory where Allen Stanford has a home and business interests, the Governor John deJongh expressed deep concern about the potential economic impact and loss of jobs.

The governor's spokesman said that there have been recent reports that 18 Stanford employees have lost their jobs on St Croix.

Latin America

The Stanford empire also extends to parts of Latin America.

Across South America, clients of local branches of the Stanford financial group queued to close their accounts.

Venezuela

Venezuela government seizes Stanford Bank

Venezuela has announced action against companies belonging to the Texan billionaire, Allen Stanford, who is accused of fraud worth an estimated $8 billion.

Venezuela's Finance Minister Ali Rodriguez, said his government was taking control of Stanford Bank Venezuela and planned to sell it.

The country's banking regulator Edgar Hernandez had earlier assured depositors that the bank was fine, after queues formed to withdraw money.

Mr Stanford's assets have been frozen over the alleged fraud and his whereabouts are unknown.

Ecuador and Panama

The Ecuadorian branch of Stanford said that domestic savers will not be affected by what they called the "massive fraud" that has hit the company in the US.

Carla Roggero, manager of the Quito office, told newspaper Hoy that all Latin American branches of the company were independent from the headquarters.

But in Panama the banking watchdog announced it was taking over the local affiliate of the group.

Colombia

In Colombia, the authorities suspended all activities of the local brokerage unit of Stanford, known as Stanford SA. They say they act to "protect clients and investors" and "preserve confidence in the stock market".

The director of Stanford's brokerage operation in Bogota, Alvaro Camaro, told Reuters news agency that the move was "not an intervention", but "a decision to withdraw from activities that have been made by the company and accepted by the Financial Superintendence because the firm has no liquidity problems".

Under the terms of its withdrawal from the market, Stanford's Colombian operations will be limited to fulfilling outstanding commitments in the stock market and returning funds to its clients.

Mexico and Peru

In Mexico, Stanford company Fondos said in a press statement that "Stanford International Bank is another entity of the same group".

In Peru, the stock market watchdog carried out an inspection in the small brokerage unit of Stanford there. According to Reuters, however, its presence in the Peruvian market is small and the company was still operating earlier on Wednesday.

 
 
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