Allen Stanford Arrested and Charged with Fraud

It has been reported that Allen Stanford has been arrested and charged with fraud by US authorities.

The Securities and Exchange Commission said that they were "alleging a fraud of shocking magnitude".

The ECB reacted to the news with a statement saying it and the West Indies board had "suspended negotiations with Sir Allen Stanford and his financial corporation concerning a new sponsorship deal".

Earlier today the SEC accused Stanford, the head of the Stanford Financial Group, of fraud in the sale of about US$8 billion of high-yielding certificates of deposit held in the firm's bank in Antigua. James M. Davis, a director and chief financial officer of Stanford Group, was also arrested

The SEC said it could not account for the US$8 billion in assets that were housed in the Antigua bank after issuing subpoenas for bank records and to various witnesses. Most of those subpoenaed, including Davis and Stanford, failed to testify or produce documents relating to the assets.

The SEC went on to describe claims by the bank that it paid "significantly" higher returns on its CDs because of the high quality of its investments as "improbable, if not impossible". It is believed that Stanford and Davis's assets have been frozen pending further investigations and that their passports have been confiscated.

The SEC's investigation into Stanford Financial Group comes at a time it is under considerable pressure inside the USA for its inaction regarding the multi-billion Bernard L. Madoff case.