Former Stanford CFO recalls ‘a lot of tears’

As federal regulators closed in on R. Allen Stanford’s teetering financial empire in early February 2009, his top executives gathered in Miami, still convinced they could avoid disaster, The Houston Chronicle reports. But that was before James Davis, Stanford’s chief financial officer, laid out what none of them knew until that day: that 75% of the portfolio of the offshore bank at the center of the empire was mired in billions of dollars in debt and stuck in messy real estate deals and other business ventures. “There was a lot of tears,” Davis testified Monday, recalling for jurors at Stanford’s fraud trial how Stanford’s top lieutenants reacted when Davis presented the secret portfolio called Tier III, the holdings of which had been known only to him and Stanford. “They were taken aback,” said Davis, who pleaded guilty for his role in what prosecutors allege was a $7 billion Ponzi scheme. Davis spent his third day on the witness stand Monday, detailing harrowing months and weeks in late 2008 and early 2009 when CD investors demanded to cash out as world financial markets cratered. Federal regulators shut down Houston-based Stanford Financial Group and its many subsidiaries in February 2009. On the stand, Davis described throwing computer equipment containing financial records into a lake near his Mississippi home as investigators were circling. Read the full story here.