The U.S. Securities and Exchange Commission suspected that the Texas-based Stanford Financial Group was a massive Ponzi scheme eight years before it took any action to shut the company down, according to a shocking 151-page report released last week by the agency's inspector general. Click here to download a 159-page pdf of the report.
From 1997 to 2005, the SEC ignored tip-offs from Stanford Financial Group insiders, numerous complaints, and four separate examinations conducted by its own employees which concluded that the Stanford Financial Group was likely a front for a fraudulent investment scheme. It wasn't until 2005 that the SEC's Fort Worth office launched a formal investigation of the firm.
Democratic lobbyist and former Texas Lieutenant Gov. Ben Barnes has been slapped with a $5 million lawsuit over lobbying and consulting services he provided to R. Allen Stanford, the indicted financier accused of running a multibillion-dollar Ponzi scheme.
The suit was filed on Mar. 15 by Ralph Janvey, the receiver appointed by the court to recoup the investors’ losses. It alleges that Barnes raked in millions doing consulting and lobbying work for Stanford’s fraudulent investment empire since 2005. Stanford is accused of bilking tens of thousands of investors out of nearly $8 billion, in one of the largest phony investment schemes of all time.