DEFINITION of Sir Allen Stanford
Sir Robert Allen Stanford is a former banker that was convicted following an investigation for securities fraud in excess of $8 billion. It was revealed that Allen Stanford had grossly misinformed his 50,000 investors about the level of professional management that they were receiving. Allen and his associates were also suspected of possible dealings with Mexican drug cartels.
In a lawsuit, Stanford's investors investors claim that on four instances and as early as 1997, the SEC determined that Stanford was running an illegal Ponzi scheme. Still, the agency did not act accordingly and failed to notify the Securities Investor Protection Corporation (SIPC). Investigators did not bring charges against Stanford until 2009, in the wake of the global financial crisis.
Once a billionaire and one of the richest men in America, Allen Stanford received a 110-year prison sentence in a 2009 ruling, and has faced further indictments from the securities exchange commission (SEC) in the United States. He has reportedly been attacked while serving his jail sentence and has consistently claimed that he is innocent and has been framed.
BREAKING DOWN Sir Allen Stanford
Allen Stanford rose from humble beginnings in the town of Mexia, Texas in 1950 to a lower-middle class family. Beginning as an insurance salesman and bookkeeper, Allen rose to dizzying heights as an investment manager, taking in billions of dollars in assets from both private investors and prominent figures in the political and sporting arenas. After his early business ventures ended in failure, he founded Stanford International Bank in 1991 on Antigua, laying the foundation of his empire and also becoming the island's largest employer. At its most successful, the Stanford Financial Group claimed clients from 140 countries with assets of $50 billion under management. By 2008, Stanford was one of the richest men in America, worth an estimated $2.2 billion and living an extravagant, jet-setting lifestyle in which he enjoyed power and privilege.
According to reports, in one three year period alone, Stanford spent $100 million on aircraft, which included helicopters and private Lear Jets. He even spent $12 million lengthening his yacht by just 6 feet.
Allen Stanford was eventually convicted of selling fraudulent certificates of deposit (CDs) from his offshore bank on the island of Antigua in an international $7 billion Ponzi scheme, a case that drew comparisons to disgraced broker Bernie Madoff’s multibillion dollar fraud. To date, none of the more than 20,000 investors he bilked have recovered any of their money.