VARIOUS: Banking scandal ripples through Latin America as FBI finds Allen Stanford in Virginia

Record ID: 476216

  • Title: VARIOUS: Banking scandal ripples through Latin America as FBI finds Allen Stanford in Virginia
  • Date: 21st February 2009
  • Summary: MEXICO CITY, MEXICO (FEBRUARY 19, 2009) (REUTERS) VARIOUS OF EXTERIOR OF STANFORD BANK UNIT STANFORD CLIENT READING ADVISORY NOTE ON DOOR STANFORD ADVISORY NOTE VARIOUS OF PEOPLE OUTSIDE STANFORD OFFICE (SOUNDBITE) (Spanish) JOSE ALCOCER, STANFORD CUSTOMER, SAYING: "They say they don't know what is going on. They say they don't know what will happen, that the fraud has not been classed yet. We all know that and the only thing we know right now is that our accounts are frozen. They have not been seized or anything like that, they are simply frozen." PEOPLE OUTSIDE STANFORD OFFICE (SOUNDBITE) (Spanish) KRISTIAN FRICH MARTINEZ DE VELASCO, VICTIMS' LAWYER, SAYING: "They have told us the accounts are only frozen. The bank as well as Stanford affiliated institutions are involved. All accounts are frozen. A review is being carried out and an internet website was given. No further information has been given. If someone wishes to cancel the account, a paper has to be filled out and sent by fax and that's it. As many people as possible in Mexico and the United States will get together to sue the company. The demand will have more impact if as many people as possible are involved." LAWYER TALKING TO AFFECTED CUSTOMERS PERSON LEAVING BUILDING LIMA, PERU (FEBRUARY 19, 2009) (REUTERS) VARIOUS OF LIMA FINANCIAL CENTRE FROM WHERE "Stanford Group Peru SAB" OPERATES JOURNALISTS IN HALL OF CONGRESS (SOUNDBITE) (Spanish) ISAAC MECKLER, CONGRESSMAN OF NACIONALISTA PARTY, SAYING: "We had warned that the crisis wasn't over with some U.S. banks, that it was going to worsen and I think more banks will fall. That's why we have summoned the president of the BCR (National Reserve Bank); we summoned the head regulator of banks and finances in Peru and they told us that all was calm, that nothing was going to happen in Peru. Now we can see that something did happen and that it will affect some investors that are in banking, at Stanford investment fund. So it's not that we were so shielded, it's not that in we were so protected in Peru, even those who invested in a foreign bank." JOURNALISTS IN HALL (SOUNDBITE) (Spanish) LOURDES ALCORTA, CONGRESS WOMAN FROM NATIONAL UNITY PARTY, SAYING: "One of the problems that there's been in the United States is that there's no superintendent at this level who has been able to control the criminal barbarity by the large banks of the U.S., the large financiers. The usury, avarice-- that's what they've produced. They didn't care one whit about the world. Hopefully, they'll take the appropriate measures so that this doesn't affect us because Peru is a country that can confront the crisis very well." HALLWAYS OF CONGRESS
  • Embargoed: 8th March 2009 12:00
  • Keywords:
  • Topics: Finance
  • Reuters ID: LVABM9X67PFXZ1619YPZTENP91ZD
  • Story Text: Latin American countries moved swiftly against Stanford businesses on Thursday (February 19), after Texas billionaire Allen Stanford, two colleagues and three Stanford companies are accused of a "massive fraud" by the U.S. Securities and Exchange Commission (SEC).
    The SEC accused Stanford in a civil complaint on Tuesday (February 17) of fraudulently selling $8 billion (U.S. dollars ) in certificates of deposit with impossibly high interest rates from his Antiguan affiliate, Stanford International Bank Ltd (SIB).
    The CNBV regulator is looking into whether Mexican unit Stanford Fondos broke laws on investing abroad. Mexican financial laws forbid Mexican banks to encourage clients to invest in unauthorized certificates of deposits abroad.
    People have scrambled to get back their money from firms linked to Texas billionaire Allen Stanford, as fallout from U.S. fraud charges against him spread from the United States and the Caribbean to Latin America and Europe.
    Several dozen people gathered outside a Stanford office in Mexico City on Wednesday (February 18) to try to withdraw their money but there were no queues on Thursday, as only a few people waited for news.

    "They say they don't know what is going on. They say they don't know what will happen. That the fraud has not been classified yet. We all know that and the only thing we know right now is that our accounts are frozen," said Stanford customer Jose Alcocer.

    "All accounts are frozen. A review is being carried out and an internet website was given. No further information has been given. If someone wishes to cancel the account, a paper has to be filled out and sent by fax and that's it. As many people as possible in Mexico and the United States will get together to sue the company," said victims' lawyer Kristian Frich Martinez De Velasco.
    Peru's securities regulator suspended a local Stanford affiliate from trading as lawmakers expressed concern.

    "They told us that all was calm, that nothing was going to happen in Peru. Now we can see that something did happen and that it will affect some investors that are in banking, at Stanford investment fund," said Congressman Isaac Meckler. "So it's not that we were so shielded, it's not that in we were so protected in Peru, even those who invested in a foreign bank."
    Another Andean nation, Ecuador, announced it was seizing two local Stanford units -- a brokerage house and a fiduciary firm.

    "The resolution to intervene in Stanford is a precautionary measure for the public interest, investors' interests and the general interest of the Ecuadorean financial community," said Santiago Noboa, the state regulator of the stock exchange in Quito.
    Colombia has asked U.S.-based Stanford representatives for details of local investors' overseas holdings in the scandal-hit financial empire.
    Colombia 's Financial Superintendent Roberto Borras said a local Stanford brokerage, which halted its operations on Wednesday, had already transferred $27 million to other firms at the request of some of its roughly 4,000 clients.

    "I want to stress that we've already asked the representatives of the foreign financial group for information about the identity and facts about the clients, the number of clients and their (overseas) operations that could have clients living in Colombia and also information related to the chanels of information so that clients can know the status of the foreign group and progress in the investigation," he told a news conference, saying the firm managed some $110 million in local, peso assets.
    The scandal, emerging hard on the heels of the alleged $50 billion fraud by Wall Street veteran Bernard Madoff, has again spooked international investors and sharply increased public distrust of investment plans.
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