A Stanford Group broker came to the state attorney general’s office in early 2008 with a complaint regarding possible violations of securities law, says an official with the office. “It had to do with manipulating paperwork,” says David Caldwell, head of the criminal and special investigations division for the Attorney General’s office.
Because of the nature of the complaint, the office referred the Stanford broker to the Louisiana Office of Financial Institutions. Commissioner John Ducrest says OFI on May 14, 2008 received a copy of the interview with the broker and two or three weeks later met with the Justice Department and the Securities and Exchange Commission in Dallas on “this overall issue.” The content of the complaint, he says, was only part of what was discussed at the meeting. Ducrest says he would share more information, but can’t. “I’m really constrained, unfortunately,” he says.
Caldwell says the complaint might have indicated unethical practices, but it did not indicate to the AG’s office anything on face value relating to the alleged Ponzi scheme perpetrated by Robert Allen Stanford and his companies. “Nobody came to us and said that this guy Stanford was running a Ponzi scheme,” Caldwell says. “We definitely didn’t know that.” The OFI, however, might have known and might already have been acting on that knowledge. “I hope one day to be able to talk about what were doing at the time. There are some very positive things,” Ducrest says. “Actions we took in 2007 and 2008 will eventually come to light.”
James Davis, the chief financial officer for Stanford Financial Group, has agreed to plead guilty when appears in court on July 13, according to a report from Reuters. To read the full story, click here.—Olivia Watkins
