The Securities and Exchange Commission’s Office of the Inspector General does not find fault in the investigation of Stanford, according to a report released this morning by Congress. The report’s conclusion negates complaints and allegations the SEC’s Fort Worth, Texas, regional office dropped the ball on the investigation of Stanford because of concurrent investigations by the U.S. Department of Justice.
In the report, released at the request of U.S. Rep. Bill Cassidy, the OIG states that the regional office did open a formal investigation of Stanford on June 15, 2005. The investigation began as a result of a report given by a staff member who had been investigating the operations of the Stanford Group Company. Though there appear to be large sections edited from the report, it details the process of the investigation, including the struggle of SEC investigators to obtain pertinent information from Robert Allen Stanford, his attorney, “certain jurisdictional obstacles, and, according to a recent DOJ indictment, criminal obstruction of the FWRO’s Stanford investigation by several individual including the head of Antigua’s Financial Services Regulatory Commission.”
The report also indicated that the timeline or stress of the investigation was increased in fall 2008 as a result of the investigation into Bernard Madoff, but that it was not initiated because of that incident. It was at that time that the Fort Worth office asked the DOJ for permission to continue its investigation; a request that the DOJ granted—ultimately resulting in the SEC action taken on Feb. 17. To read the full report, click here.—Olivia Watkins
