Securities and Exchange Commission [SEC]: A federal agency tasked with regulating, primarily through information gathered by tips to the agency, the financial market. The SEC, in relation to Stanford, regulates U.S.-based securities. The Stanford International Bank CD, however, did not fall under the purview of the SEC. The securities agencies, including Stanford Financial Group, Stanford Group Company and Stanford Trust Company did fall under the authority and regulation of the agency.
Financial Industry Regulatory Agency [FINRA]: FINRA is a self-regulatory agency overseeing the financial service firms, including the U.S.-based Stanford companies. FINRA serves to execute member enforcement and to mediate investor-adviser arbitration. In 2007, the National Association of Securities Dealers, which also regulated the financial services industry, merged with FINRA.
Securities Investor Protection Corporation [SIPC]: A nonprofit corporation which protects investors against the loss of their securities and cash in the incident of the brokerage firm’s failure. The insurance is only applied, however, if the value of the securities or cash was maintained despite the failure of the brokerage firm. In the case of Stanford, SIPC insurance did not apply because the CDs were part of an alleged Ponzi scheme, meaning they held no monetary value.
Louisiana Office of Financial Institutions [OFI]: Run as part of the Office of Governor, the OFI is responsible for monitoring and regulating financial service entities within the state. Both the Stanford Group Company and the Stanford Trust Company were registered and regulated through the OFI. And both entities were required to complete and submit annual audits to the agency.
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