The SEC on February 17 sued three Stanford companies founded by Texas financier R. Allen Stanford, as well as Stanford, Davis and Stanford’s Chief Investment Officer Laura PendergestHolt. The regulator accused them of misleading investors through the sale of $8 billion in fraudulent certificates of deposit at Antigua-based Stanford International Bank.

Davis and Stanford are accused of orchestrating a “massive Ponzi scheme” that misappropriated at least $1.6 billion in “bogus personal loans” to Allen Stanford and “fabricated the performance of SIB’s investment portfolio” to lure investors to the bank’s high-rate CDs, according to the SEC’s amended complaint.

US District Judge David Godbey in Dallas, who presides over the case, issued a preliminary injunction freezing all corporate and personal assets of Stanford-related companies and the three executives.

Source: Bloomberg