Stanford used SEC, law enforcement officials to deflect suspicion

As the trial of accused swindler R. Allen Stanford’s resumes today for the second week, one major question has yet to be raised in the courtroom: How did he keep authorities at bay for so long? An examination of his case by news agency Reuters finds the answer lies in part in the legal advice he obtained from former SEC officials, other regulators and law enforcement officials. In 2009, federal investigators finally arrested Stanford. But for 20 years, he allegedly had run a $7 billion Ponzi scheme from his offshore bank on the Caribbean island of Antigua. U.S. authorities had been nosing around Stanford’s empire for longer than a decade but hesitated to open a full-blown probe. Among those Stanford sought help from was famed securities lawyer Thomas Sjoblom. Then a partner at the international law firm of Proskauer Rose and chair of its securities practice, Sjoblom also was a former 20-year veteran of the U.S. Securities and Exchange Commission’s enforcement division. He is one of the most senior attorneys ever to be investigated for allegedly crossing the line from legal advocacy on behalf of a client to violating the law. He hasn’t been charged, however, and it is possible he never will be. Stanford also paid at least eight former senior U.S. and foreign regulators and law-enforcement officials for legal advice or investigative services. Stanford is on trial in federal court in Houston on charges he defrauded more than 30,000 investors from more than 113 countries, and also obstructed the SEC’s investigation of him. Only Bernard Madoff is alleged to have stolen more. Stanford has pleaded not guilty. Check out the full story here. Meanwhile, Houston Chronicle reporter Terri Langford is providing live updates at the Stanford trial via Twitter, and you can follow the action at her feed here.