Stanford Financial Group Corporate Scandal

Good Essays
Stanford Financial Group Corporate Scandal

Authors: Brian Bailey, Gina Hallman, Matthew Kazor,
ShaVonne Robinson, Daryl Wertz, and Devin Williams

Date: Week 5 Tuesday 22nd January 2013

1-2. In February of 2009, the Antigua/Texas based global financial group (made up several subsidiaries owned by the same owner) owned by R. Allen Stanford was charged with scamming their customers by the Securities and Exchange Commission. Stanford Financial Group was charged with fraud when deceptively selling consumers $8 billion dollars in deposit certificates. According to The Money Alert, ”A certificate of deposit, or CD, is a type of low-risk investment that many people use when they want a small return on their investment without having
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The Houston Texas, firm and subsidiaries were involved in a huge Ponzi con artist scheme which resulted in 20 years of stealing over $7 billion international dollars. The end result was $17,000 supposed investors turned victims in the U.S. and other locations within the Americas. Davis in particular was originally on the cusp of having to serve 110 years, shortening his sentence because he as the second in charge he was able to provide a copious amount of priceless data against Stanford who’s end sentence was 110 years.
5. There were several sanctions levied against the corporation: (1) James M. Davis, CFO of Stanford International Bank (SIB) and Houston-based Stanford Financial Group, was sentenced today to five years in prison for his role in helping Robert Allen Stanford perpetrate a fraud scheme involving SIB and for conspiring to obstruct a U.S. Securities and Exchange Commission (SEC) investigation into SIB. (2) Personal money judgment of $1 billion. (3) Stanford and Holt are currently serving 110 years and three years in prison, respectively. (4) Lopez and Kuhrt are in federal custody and await sentencing, scheduled for February 14, 2013.
6. Our thoughts on the sanctions for Allen Stanford were fair enough and taken very seriously. Stanford was sentenced to 110 years in prison with a one billion dollar fine. However, the sanctions for James Davis are not severe enough. Conversely,
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