SEC vs. Stanford: same return for two years – a red flag?
On February 17th, 2009 the SEC charged Stanford International Bank (SIB), R. Allen Stanford, et al with “a massive ongoing fraud.” Below are comments regarding potential challenges to SEC’s rationale and approach in supporting their case presented in the complaint on SEC website. As shown in the excerpt below, the SEC points to SIB’s absolute […]
On February 17th, 2009 the SEC charged Stanford International Bank (SIB), R. Allen Stanford, et al with “a massive ongoing fraud.” Below are comments regarding potential challenges to SEC’s rationale and approach in supporting their case presented in the complaint on SEC website.
As shown in the excerpt below, the SEC points to SIB’s absolute performance vs. market indexes:
“Double-digit returns… over the past 15 years” which refers to the chart in Par. 28 of the complaint. Note that these are gross returns, while net returns paid to investors were about 8%. Many hedge funds generated higher after fees returns in 1992-2006. Plus, Stanford returns were high three and five years ago, so there must be something else.
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