Former Stanford executives and brokers may face sanctions

U.S. Securities and Exchange Commission investigators are proposing sanctions against at least five former Stanford Group Co. executives and brokers for their role in selling investments that fueled R. Allen Stanford’s alleged $7 billion Ponzi scheme, two people “with knowledge of the matter” are telling Bloomberg. The SEC’s five commissioners are scheduled to vote Thursday on whether to authorize the enforcement actions, which target brokers and senior executives at Stanford’s Houston-based brokerage, the sources say—speaking on condition of anonymity because the matter has yet to be discussed publicly by the SEC and others. The vote by the commissioners could still be delayed or tabled, however, the sources say. The actions, which seek to bar the executives and brokers from working in the industry and to claw back sales commissions, come almost three years after the SEC sued Stanford and a federal grand jury indicted him on 21 criminal counts alleging he used his U.S. brokerage to sell bogus certificates of deposits for his Antigua-based bank. The SEC lawyers claim the employees ignored red flags signaling that they were selling fraudulent products, such as above-market returns promised on the CDs and outsized commissions to the brokers who sold them, one of the sources claims. Stanford, 61, has denied the fraud allegations and last month requested that his Jan. 23 trial date be delayed by three months after his expert witnesses quit because they weren’t being paid. He is being held without bail. Stanford’s former accountants and heads of finance and investment also face criminal and civil claims. Read the full story here.