Corporate Scandal Stanford

2590 WordsApr 20, 201211 Pages
What Went Wrong: Case Study of a Selected Corporate Scandal “In Texas, Robert Allen Stanford appeared to be yet another flamboyant billionaire. But in the breezy Caribbean money haven of Antigua, he was lord of an influential financial fief, decorated with a knighthood, courted by government officials and basking in the spotlight of sports and charity events on which he generously showered his fortune.” This quote from an article in The New York Times portrays the life of Mr. Stanford, owner of the Stanford Financial Group that was shut down in 2009 for what regulators describe as “massive ongoing fraud”. Stanford Financial Group, with headquarters in Houston, Texas, was a privately held international group of companies that provided…show more content…
Another factor that played an important role in providing for the possibility of instituting such a complex scheme that was able to last for so many years it the fact that Stanford specifically chose to base the bank in the Caribbean island of Antigua. While in Antigua, the officers of the corporation were able to take advantage of the much less rigorous regulations, as compared to a country like the U.S., structure which allowed them to establish the conditions for the scheme. The Stanford case has a clear component of negligence and laxity from the regulatory authorities who, having clear elements for suspicion since a long time before, were indifferent and allowed the fraudulent and criminal conducts to prolong for a great time thus being able to affect and deceive a larger number of clients and consequentially a much larger sum of money. It is clear therefore that the so-called “fiscal paradises” have been key factors in the development of this kind of financial frauds. The establishment of Stanford in Antigua served as a sham to evade the controls to which, by nature of their activities, are submitted all financial institutions receivers of money from third parties in the majority of countries around the world. A very important aspect that needs to be highlighted is the role the clients play in this kind of schemes. Had there not been
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