A Ponzi Scheme in Boca? Stanford Group Co. Won't Talk
Speculation is rampant in the financial press that R. Allen Stanford -- who Forbes magazine estimates to have a fortune of $2.2 billion, making him #205 on their list of wealthiest Americans -- is the next Bernie Madoff. Forbes says Stanford Financial Group has $51 billion in assets under management. It just so happens that Stanford has an office in Boca Raton that caters to wealthy individuals. The 16 financial advisors listed on this Stanford website profess to have seemingly good credentials, such as studies at reputable universities and work experience with big-name financial firms.
The furor over Stanford was sparked by this report -- written by financial analyst Alex Dalmady. Dalmady and others in the financial world wonder how Stanford can pay unusually high returns on certificates of deposit (CDs). For additional commentary from Dalmady on the subsequent uproar and what led him to check out Stanford in the first place, go to salon.com.
A secretary at Stanford's Boca office refused to forward my phone call to any of the firm's managing directors, saying that nobody at the office knows what's going on. Holly Hinson, spokesperson for Florida's Office of Financial Regulation, says that regulators have the firm "under exam." Hinson says she cannot elaborate further. Brian Bertsch, Stanford Financial Group's press director in New York, says the company will comply with all investigations. When asked whether the money of Stanford clients is safe, he said that the company "follows industry standards for marketing and sales practices."
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