There's a a top story in BusinessWeek online edition about Stanford Financial. It says regulators are taking a hard look at the company. The gist of the article is that the company has been paying above market returns but the underlying assets don't seem to support that. There's no allegations at this point of wrongdoing--just an investigation. If it's not true, it's the kind of thing that causes a run on the bank. Since it's a;ready out there as news however, I thought some of you might be interested.
Here is the link:
also article in wall street journal.
That's too bad. It's bad for the investors, employees of Stanford, and bad for STX. Here's a quote that seems to sum things up:
"the SEC's Fort Worth regional director, says, "We are alleging a fraud of shocking magnitude that has spread its tentacles around the world."
Does anyone know Stnaford's headcount on the island?
The business next to mine in Atlanta just closed today. They were funded by Stanford. The SEC is seizing assets and freezing the accounts. They are alleged to have created an $8 billion ponzi scheme like Madoff. They have been under investigation since the Madoff deal. The feds closed them down today and are working with the Caribbean bank to repatriate the assets to settle debts. My neighbor said everything in their company will go into receivership.
We have the resources here if they think he is here. There are Marshals here. Last time I heard they even had a couple of permanent ones, but when they don't they live down here in rotation. Be crazy to hide here, someone would turn him in hoping for a reward or informant money.
He probably got EDC benefits, so that program has taken another major hit.
Stanford was greedy, and those who dealt with him were also greedy, so it's hard to be concerned about the losses of those involved. People who could've invested in the safe, low earning investments the majority of us have, chose higher risk investments with extraordinary potential yields. Employees knew the "amazing benefits" and "great pay" weren't customary for the area and chose to accept the jobs anyway, knowing there had to be some reason for such pay and benefits to be offered. Due diligence by investors and employees could've prevented their involvement in this particular mess, and their failure to anticipate the obvious doesn't merit much empathy.
I don't think you can assign blame to local Stanford employees just because they received a great compensation package. There are many highly skilled folks living on-island who came from high paying positions on the mainland. There is no reason to expect to significantly lower the value one adds to an organization based on geographic location. Especially when most transplants face increased expenses. It is a great disappointment that one of our better paying employers is facing these accusations of impropriety. After all a rising tide floats all boats.