Panama bank regulators seize local Stanford affiliate
(reuters.com) Panamanian bank regulators said on Tuesday they had taken over the local affiliate of Stanford Financial Group after U.S. authorities charged the group and its founder with perpetrating a "massive" fraud.
The regulators said they stepped in after news of the charges against Texas billionaire Allen Stanford and three of his companies prompted a run on deposits at Stanford Bank (Panama).
The U.S. Securities and Exchange Commission (SEC) accused Stanford and two other group executives of fraudulently selling $8 billion in high-yield certificates of deposits (CDs) in a scheme that stretched around the world.
The SEC complaint named Stanford International Bank, based in Antigua, as well as broker-dealer and investment adviser units based in Houston.
Separately, Stanford Bank Venezuela sought to calm clients by saying its assets were not linked to Stanford International Bank and requested a national banking authority representative to sit on its board.
"To offer greater tranquillity to its clients, Stanford Bank has requested a permanent representative of the banking Superintendent on its board, with the aim of offering greater transparency to its users," the Venezuelan bank's board said in a statement.
Stanford Bank Venezuela is a small retail bank that lends to clients within the South American nation. Stanford International Bank has grown rapidly in recent years, in part with funds from Latin American countries.
In addition to the Panamanian and Venezuelan banks, Stanford Financial Group operates affiliated banks, brokerages and other companies in Colombia, Mexico and other Latin American countries, according to its website.
