Scalise: Pushing for Answers on the Stanford Ponzi Scheme

Thousands of Louisianans including many St. Tammany Parish residents were victimized by financial fraud and deception

Friday, July 10, 2009

Washington, DC -- Congressman Steve Scalise attended a briefing this week about the Stanford Ponzi scheme investigations and recent arrest of Robert Allen Stanford, with the Securities and Exchange Commission (SEC). Stanford, Chairman of the Stanford Financial Group was recently arrested on charges of securities fraud. Thousands of Louisianans, including many residents of St. Tammany Parish, were victimized by the Stanford Financial Group.

On May 1, Scalise met with the SEC and Rep. Dennis Kucinich (D-OH), Chairman of the Domestic Policy Subcommittee of Committee on Oversight and Government Reform. On June 18, Scalise joined the Louisiana Congressional Delegation as well as Members from Texas, Florida, Pennsylvania, Mississippi and Alabama sending a letter to the SEC requesting an investigation into the Stanford Ponzi scheme.

"The SEC and other federal agencies must move aggressively and take these claims seriously because there are thousands of people in south Louisiana who have been victimized by this Ponzi scheme,” Scalise said. “I am confident that the SEC has taken our requests seriously. The Louisianans who were victimized deserve the opportunity to recoup their money that was swindled. I will continue working hard with other agencies that have been investigating the claims by the Stanford Victims Group.”

Representatives from the SEC briefed Members and staff who signed onto the June 18, 2009 letter to SEC Chairwoman Mary Schapiro.  They addressed the issues and requests put forth in the letter as well as answering questions by Members and staff about the SEC’s actions and activities throughout the Stanford investigation.

A copy of the letter Scalise and the Members of Congress sent are below:

June 18, 2009

Chairwoman Mary Schapiro
Securities and Exchange Commission
100 F St. NE
Washington, DC 20549

Dear Chairwoman Schapiro,

We write to you on behalf of the thousands of American citizens who are entangled in the alleged fraud and deceptive practices of Allen Stanford and his various financial service companies.  We seek cooperation with your office to ensure justice for those who have been wronged, restore confidence in the regulatory authority of the United States, and protect others from future harm.

While the first public action taken by the SEC to address Mr. Stanford's conduct occurred in February 2009, the Complaint alleges a massive Ponzi scheme was underway within the Stanford organization for at least a decade.  Additionally, the SEC has investigated Mr. Stanford and his companies since 2005.  Quicker and more thorough action by the SEC might have mitigated the losses of thousands of investors.

Thousands invested their entire life savings or a substantial portion of their savings in Stanford Certificates of Deposit (CDs).  These investments are at risk and we request the SEC provide a plan for restitution for the CD holders and clarify the types of accounts the Receivership holds.  This includes accounts owned by individuals and held by third party firms, and CD accounts which are the foundation of the Complaint.

We encourage you to devote time, focus, and resources to ensure the Stanford Receivership is efficient and effective.  Restoration of public confidence in regulatory institutions and trust that the investigation will be thorough, complete, and professional is imperative.  To assist us and the thousands of impacted Stanford investors, we request the following:

•    Release all internal memoranda and information received by the SEC discussing potential fraud by Allen Stanford and his associates within all Stanford-affiliated companies prior to the February 17, 2009 filing of charges.
•    Implementation of a full, independent audit of all expenses incurred throughout the Stanford Receivership, including but not limited to legal fees, travel expenses, and other expenditures made by Ralph S. Janvey, the court appointed Stanford Receiver.  Additionally, we request an independent audit of all other organizations retained by the Receiver to carry out the Receivership duties.

We want to stress the urgency of these matters.  Many individuals are suffering severe economic hardship as a result of these events. They deserve answers and solutions as quickly as possible.  We want to thank you in advance for your cooperation and look forward to your quick response.

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Contact: Luke Bolar
202-226-4309