Billionaire financier and cricket entrepreneur Allen Stanford has been charged by US regulators over an alleged multi-billion dollar fraud. The England and Wales Cricket Board have confirmed they have suspended negotiations with Stanford over a new sponsorship deal as a result of the allegation.
The Securities and Exchange Commission (SEC) filed a complaint in a Dallas Court against Stanford and three of his companies for "orchestrating a fraudulent, multi-billion dollar investment scheme" relating to an “$8 billion CD (certificate of deposit) programme”.
The SEC is alleging fraud "of a shocking magnitude" with "tentacles throughout the world".
In a short statement released today, The ECB said: "Following allegations made today (Tuesday) by the US Securities and Exchange Commission and their decision to apply for a temporary restraining order which was filed in a Dallas/Fort Worth court, the England and Wales Cricket Board and the West Indies Cricket Board have suspended negotiations with Sir Allen Stanford and his financial corporation concerning a new sponsorship deal."
The Securities and Exchange Commission issued a press release which stated: "The Securities and Exchange Commission today charged Robert Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centring on an $8 billion CD (certificate of deposit) programme.
"Pursuant to the SEC's request for emergency relief for the benefit of defrauded investors, US District Judge Reed O'Connor entered a temporary restraining order, froze the defendants' assets, and appointed a receiver to marshal those assets."
The SEC statement continued: "The SEC's complaint, filed in federal court in Dallas, alleges that acting through a network of SGC (Stanford Group Company) financial advisers, SIB (Stanford International Bank) has sold approximately eight billion US dollars of so-called "certificates of deposit" to investors by promising improbable and unsubstantiated high interest rates.
"These rates were supposedly earned through SIB's unique investment strategy, which purportedly allowed the bank to achieve double-digit returns on its investments for the past 15 years."
The SEC say in their complaint that Stanford and fellow defendants, SIB chief financial officer James Davis and Laura Pendergest-Holt, the chief investment officer of Stanford Financial Group, had "misrepresented to CD purchasers that their deposits are safe".
"As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, director of the SEC's Division of Enforcement.
"We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."
A spokesman for Stanford 2020 declined to comment.