Stanford reassures employees over 'routine' probe

Texas billionaire and cricket mogul Allen Stanford sought to reassure his employees as US regulators probed his investment firm and Caribbean bank, which have delivered higher-than-average returns to investors and depositors despite the global meltdown.

Investigators visited Florida offices of the Houston, Texas-based Stanford Group Co in January as part of a probe that dates back at least three months, said a US official with knowledge of the probe.

The probe by the Securities and Exchange Commission, the Financial Industry Regulatory Authority – the US brokerage industry’s self-policing body – and the Florida Office of Financial Regulation seeks to determine if Mr Stanford’s company violated financial regulations or laws as it prospered and delivered high returns on certificates of deposit in recent years, the official said.

A spokeswoman for the Florida agency, Holly Hinson, confirmed its investigation but said she could not disclose details.

A Stanford spokesman earlier denied anything was unusual about the regulators’ visit last month to company offices in Florida.

“We were informed by the three agencies that this was a routine examination,” spokesman Brian Bertsch said.

In an e-mail to employees, Mr Stanford said his company was cooperating with the probe of its operations.

He also said “former disgruntled employees” made complaints that could complicate an “otherwise routine examination”, without going into details.

“I want to assure you that if they find any areas in which we need to improve or alter our operations, we will take immediate action to correct them,” he said in the e-mail. “You and our clients deserve no less.”

Mr Stanford, 58, is one of the most prominent businessmen in the Caribbean, with investment advisers around the world helping him grow a personal fortune estimated at $2.2bn (€1.7bn) by Forbes magazine.

His Stanford International Bank Ltd, said deposits grew from $624m (4483m) in 1999 to $8.4bn (€6.5bn) in December.

The bank is based in the twin-island Caribbean nation of Antigua and Barbuda, which has carved out a niche as a tax haven and offshore base for internet gambling.

The bank, Mr Stanford said, remains strong. He said he had made two capital infusions and was considering other steps to protect depositors.

He said: “You, your managers and I, will fight with every breath to continue to uphold our good name and continue the legacy we have built together.”

The bank said on its website it is able to pay higher interest to depositors “by channelling available resources into profitable activity,” through investing and by having lower administrative costs by relying on “services and support of wholly owned Stanford affiliates located throughout the world”.

Last year Mr Stanford shook up the world of professional cricket by bankrolling the purse in a $20m (€15.5m) US dollar winner-take-all match in Antigua.