He's no Bernie Madoff
February 17, 2009 3:48 PM Subscribe
Another massive Ponzi scheme uncovered. Meet Sir Allen Stanford and his bank. Sir Allen stands accused of running an $8 billion fraud. Read the SEC filings here.
Sir? Isn't that a title of nobility US citizens are Constitutionally barred from holding?
posted by pwnguin at 4:01 PM on February 17, 2009
posted by pwnguin at 4:01 PM on February 17, 2009
Since when do the rich give a fuck about what the constitution says?
posted by eriko at 4:03 PM on February 17, 2009 [2 favorites]
posted by eriko at 4:03 PM on February 17, 2009 [2 favorites]
See also: a series of reports from the FT. Stanford is best known in the UK for his flashy sponsorship of (what was to be) a series of cricket matches, and his dubious behaviour with the players' wives in the days before the first such match. The ECB have suspended negotiations with Stanford about future tournaments.
posted by Electric Dragon at 4:05 PM on February 17, 2009
posted by Electric Dragon at 4:05 PM on February 17, 2009
Sir Allen is a citizen of Antigua, which knighted him in 2006. It caused a kerfuffle in England.
posted by up in the old hotel at 4:06 PM on February 17, 2009
posted by up in the old hotel at 4:06 PM on February 17, 2009
Apparently he also holds Antigua and Barbuda citizenship and it is from them he got the knighthood.
posted by Electric Dragon at 4:07 PM on February 17, 2009
posted by Electric Dragon at 4:07 PM on February 17, 2009
It's probably his first name. They could probably use their names as an excuse, actually. I mean, nobody named Laura Pendergest-Holt holds up a liquor store for a crack hit. That would be really bad.
If it takes you half an hour with a calculator, a textbook on SEC filings and three screenings of Wall Street to understand what the fuck they actually did, it softens the blow a little.
posted by jimmythefish at 4:07 PM on February 17, 2009
If it takes you half an hour with a calculator, a textbook on SEC filings and three screenings of Wall Street to understand what the fuck they actually did, it softens the blow a little.
posted by jimmythefish at 4:07 PM on February 17, 2009
Not really a Ponzi scheme:
The S.E.C. accused the bank and its affiliates of falsely stating in marketing materials that client funds were placed in liquid financial instruments, when in fact they were invested in private equity funds and real estate.
The complaint says that they misrepresented how the funds were being invested, whereas an actual Ponzi scheme doesn't actually invest in anything at all.
posted by burnmp3s at 4:09 PM on February 17, 2009
The S.E.C. accused the bank and its affiliates of falsely stating in marketing materials that client funds were placed in liquid financial instruments, when in fact they were invested in private equity funds and real estate.
The complaint says that they misrepresented how the funds were being invested, whereas an actual Ponzi scheme doesn't actually invest in anything at all.
posted by burnmp3s at 4:09 PM on February 17, 2009
Since when do the rich give a fuck about what the constitution says?
I await the day when the US formally recognises their true nobility: Godfather of Soul and the King of Pop. Preferably, by Constitutional Amendment.
posted by Fiasco da Gama at 4:09 PM on February 17, 2009 [2 favorites]
I await the day when the US formally recognises their true nobility: Godfather of Soul and the King of Pop. Preferably, by Constitutional Amendment.
posted by Fiasco da Gama at 4:09 PM on February 17, 2009 [2 favorites]
Is anyone surprised that someone who was knighted by and who actively promotes tax shelters has been accused of fraud?
I wanna know where he is. I wanna see cuffs and know that he isn't hanging out in some non-extradition country.
posted by christhelongtimelurker at 4:13 PM on February 17, 2009 [1 favorite]
I wanna know where he is. I wanna see cuffs and know that he isn't hanging out in some non-extradition country.
posted by christhelongtimelurker at 4:13 PM on February 17, 2009 [1 favorite]
I mean, nobody named Laura Pendergest-Holt holds up a liquor store for a crack hit
She's got a little black dress and a saturday night special. The debutant ball will have to wait, tonight Laura is looking for something with a little more bite. Blue Blood/Red Stains tonight on Showtime!
posted by The Whelk at 4:16 PM on February 17, 2009 [11 favorites]
She's got a little black dress and a saturday night special. The debutant ball will have to wait, tonight Laura is looking for something with a little more bite. Blue Blood/Red Stains tonight on Showtime!
posted by The Whelk at 4:16 PM on February 17, 2009 [11 favorites]
I found Antigua, but where are the castles? Why become a knight if there are no castles to defend?
Also sad: no Google Street View (yet!)
posted by filthy light thief at 4:18 PM on February 17, 2009
Also sad: no Google Street View (yet!)
posted by filthy light thief at 4:18 PM on February 17, 2009
AP business seems to have a nice article on the local effects in Antigua:
As news of the charges broke Tuesday afternoon, panicked residents of Antigua swarmed a second bank controlled by Stanford hoping to take their money out, only to be turned away by guards. That bank was not part of the complaint released Tuesday.
posted by pwnguin at 4:20 PM on February 17, 2009
As news of the charges broke Tuesday afternoon, panicked residents of Antigua swarmed a second bank controlled by Stanford hoping to take their money out, only to be turned away by guards. That bank was not part of the complaint released Tuesday.
posted by pwnguin at 4:20 PM on February 17, 2009
christhelongtimelurker:
posted by Electric Dragon at 4:22 PM on February 17, 2009 [1 favorite]
I wanna know where he is.So too do the SEC.
posted by Electric Dragon at 4:22 PM on February 17, 2009 [1 favorite]
From the Stanford Eagle (from the Bank link):
There has never been, and there will never be, an easy way to make money. It requires discipline, knowledge, experience, hard work and plain common sense. When most in our industry were quick to jump on the easy path to perceived big profits in the securitized debt market, we decided not to follow. The reason Stanford did not get sucked up into the subprime debacle was very simple: since we could not clearly define the risk, the potential reward became irrelevant.
Translated:
We didn't want to use someone else's scam so we just made up one of our own.
posted by doctor_negative at 4:25 PM on February 17, 2009
There has never been, and there will never be, an easy way to make money. It requires discipline, knowledge, experience, hard work and plain common sense. When most in our industry were quick to jump on the easy path to perceived big profits in the securitized debt market, we decided not to follow. The reason Stanford did not get sucked up into the subprime debacle was very simple: since we could not clearly define the risk, the potential reward became irrelevant.
Translated:
We didn't want to use someone else's scam so we just made up one of our own.
posted by doctor_negative at 4:25 PM on February 17, 2009
Worth noting that this story broke in a story in Veneconomia magazine in Venezuela, which can be downloaded here. It was picked up by Venezuelan blog Venepiramides on February 6, and then made it to Portfolio.com a few days later. On February 11, there was a big article at both BusinessWeek.
posted by up in the old hotel at 4:33 PM on February 17, 2009 [1 favorite]
posted by up in the old hotel at 4:33 PM on February 17, 2009 [1 favorite]
If it takes you half an hour with a calculator, a textbook on SEC filings and three screenings of Wall Street to understand what the fuck they actually did, it softens the blow a little.
I thought the razor blade and mirror softened the blow.
posted by ryoshu at 4:36 PM on February 17, 2009 [7 favorites]
I thought the razor blade and mirror softened the blow.
posted by ryoshu at 4:36 PM on February 17, 2009 [7 favorites]
U.S. Citizens can use whatever title they want. Just look at Prince. The constitutional issue has to do with The U.K. which only allows U.K Citizens to hold the title, but as other's mentioned he got the title from Antigua.
And what is up with that ridiculous mustache.
posted by delmoi at 4:53 PM on February 17, 2009
And what is up with that ridiculous mustache.
posted by delmoi at 4:53 PM on February 17, 2009
Alas, delmoi, Prince is his first name. The Fresh Prince of Bel-Air, however, with Queen Latifah, ought to have their titles made official.
posted by Fiasco da Gama at 5:04 PM on February 17, 2009 [1 favorite]
posted by Fiasco da Gama at 5:04 PM on February 17, 2009 [1 favorite]
The proposed amendment to the constitution mentioned by pwnguin above was never ratified. It was proposed in the 2nd session of the 11th Congress but failed to achieve the required three-fourths approval. It read:
"If any citizen of the US shall accept, claim, receive or retain any title of nobility of honour, or shall, without the consent of Congress, accept and retain any present, pension, office or emolument of any kind whatever, from any emperor, king, prince or foreign power, such person shall cease to be a citizen of the US and shall be incapable of holding any office of trust or profit under them or either of them."
COME ON SHEEPLE, READ YOUR CONSTITUTION!!
posted by spicynuts at 5:07 PM on February 17, 2009 [2 favorites]
"If any citizen of the US shall accept, claim, receive or retain any title of nobility of honour, or shall, without the consent of Congress, accept and retain any present, pension, office or emolument of any kind whatever, from any emperor, king, prince or foreign power, such person shall cease to be a citizen of the US and shall be incapable of holding any office of trust or profit under them or either of them."
COME ON SHEEPLE, READ YOUR CONSTITUTION!!
posted by spicynuts at 5:07 PM on February 17, 2009 [2 favorites]
Also...never look an emolument horse in the mouth.
posted by spicynuts at 5:08 PM on February 17, 2009
posted by spicynuts at 5:08 PM on February 17, 2009
This one really hits close to home. Stanford is heavily invested in the Virgin Islands (my home) and was one of the main bidders on the daily paper for which my wife is a reporter. Thankfully Stanford pulled out of the bidding in one of the final rounds. The paper was being sold because the previous owner, Jeffery Prosser, (who controlled virtually all telecommunications in the VI and had initially purchased the paper to stem critical coverage of his business dealings) defaulted on his highly leveraged loans and declared bankruptcy.
The Caribbean seems to be particularly vulnerable to this type of scumbag. We are desperate for the economic stimulus that they bring, but lack the long-standing well-entrenched safeguards that other regions have to prevent or at least quickly rebound from the fallout of their exposure as criminals.
posted by Bango Skank at 5:11 PM on February 17, 2009 [5 favorites]
The Caribbean seems to be particularly vulnerable to this type of scumbag. We are desperate for the economic stimulus that they bring, but lack the long-standing well-entrenched safeguards that other regions have to prevent or at least quickly rebound from the fallout of their exposure as criminals.
posted by Bango Skank at 5:11 PM on February 17, 2009 [5 favorites]
Haha, check it out Allen lobbied to kill anti-fraud bill, and succeed. Nice.
posted by delmoi at 5:19 PM on February 17, 2009
posted by delmoi at 5:19 PM on February 17, 2009
I am starting to feel rather smug about just always being broke.
posted by Stonestock Relentless at 5:20 PM on February 17, 2009 [6 favorites]
posted by Stonestock Relentless at 5:20 PM on February 17, 2009 [6 favorites]
Stanford's empire is a house of cards. The Ponzi aspect of his operation was that he promised over-market returns on deposits in his offshore bank in Antigua, allowing credulous American depositors to think that because they were getting "certificates of deposit" they had safe investments. He also attracted funds from wealthy Latin Americans, operating from a "trust office" in Miami. Non-U.S. citizens could be sold dubious investments that could not be sold to Americans, with the same high rates of return promised. Payment to early investors of the promised high rates--out of the funds received from the second wave of rubes--makes the Ponzi work--at least for a while. When the bottom fell out last fall, Stanford's ability to pay off fell with it, and the whistle was blown on him by an obscure Venezuelan investment info site.
Greed, hubris, and cricket. What a heady mix. . .but lots of people are a lot poorer tonight than they thought they were yesterday.
posted by rdone at 5:32 PM on February 17, 2009
Greed, hubris, and cricket. What a heady mix. . .but lots of people are a lot poorer tonight than they thought they were yesterday.
posted by rdone at 5:32 PM on February 17, 2009
Aren't all stcok exchanges Ponzi schemes?
They're still chugging along OK thanks to population growth and new entrants?
posted by uncanny hengeman at 6:00 PM on February 17, 2009
They're still chugging along OK thanks to population growth and new entrants?
posted by uncanny hengeman at 6:00 PM on February 17, 2009
Damn. I would like to be a fly on the wall in the SEC enforcement division to find out who had this file sitting on his desk for 10 years, but couldn't get any action until the Madoff scandal broke.
posted by footnote at 6:01 PM on February 17, 2009
posted by footnote at 6:01 PM on February 17, 2009
They have a nice big building across from the Galleria. A fountain.
I hope he enjoys prison.
posted by leotrotsky at 6:04 PM on February 17, 2009
I hope he enjoys prison.
posted by leotrotsky at 6:04 PM on February 17, 2009
and then there the companies--you well know this outfit!--that find another means to avoid taxes etc
http://wikileaks.org/wiki/Tax_Gap:_Rare_glimpse_into_offshore_world_of_big_money_and_low_taxes
posted by Postroad at 6:06 PM on February 17, 2009
http://wikileaks.org/wiki/Tax_Gap:_Rare_glimpse_into_offshore_world_of_big_money_and_low_taxes
posted by Postroad at 6:06 PM on February 17, 2009
So how much do you think he paid for the peerage?
posted by aquafortis at 6:09 PM on February 17, 2009
posted by aquafortis at 6:09 PM on February 17, 2009
For the legal ethics geeks out there: one of the factors that apparently lit a fire under the SEC is that the bank's lawyers made a "noisy withdrawal" before the SEC.
posted by footnote at 6:10 PM on February 17, 2009
posted by footnote at 6:10 PM on February 17, 2009
pwnguin: Only elected officials and government officers are barred from holding foreign title.
posted by absalom at 6:20 PM on February 17, 2009
posted by absalom at 6:20 PM on February 17, 2009
Pish posh. Compared to Madoff's $50+ billion, this is chump change. AMATEUR.
haha kidding! hooray, I hate bankers even more!
posted by sararah at 6:22 PM on February 17, 2009
haha kidding! hooray, I hate bankers even more!
posted by sararah at 6:22 PM on February 17, 2009
Haven't we had enough nasty rich guy stories? Isn't the real story the apathetic ants who do nothing but delight in their master's treachery?
posted by larry_darrell at 6:38 PM on February 17, 2009 [1 favorite]
posted by larry_darrell at 6:38 PM on February 17, 2009 [1 favorite]
Whatever you do, DO NOT watch the Frontline episode tonight. It's about the financial collapse and it is hella frightening. When do we get to line these mofos up against and a wall and give them the gutshot.
posted by billysumday at 6:40 PM on February 17, 2009 [2 favorites]
posted by billysumday at 6:40 PM on February 17, 2009 [2 favorites]
"Aren't all stcok exchanges Ponzi schemes?"
Stocks are fundamentally worth the dividend income investors think they may receive by owning them. That dividend income is generated by the company producing and selling some sort of product or service with actual worth. For example, 15th and 16th century investors sharing risk by buying shares in an expedition to Calcutta in the hopes of making a profit on their investment when the ship made it back home and sold its load of spices for a profit. Ponzi schemes generate no worth.
posted by kavasa at 6:44 PM on February 17, 2009 [3 favorites]
Stocks are fundamentally worth the dividend income investors think they may receive by owning them. That dividend income is generated by the company producing and selling some sort of product or service with actual worth. For example, 15th and 16th century investors sharing risk by buying shares in an expedition to Calcutta in the hopes of making a profit on their investment when the ship made it back home and sold its load of spices for a profit. Ponzi schemes generate no worth.
posted by kavasa at 6:44 PM on February 17, 2009 [3 favorites]
I am starting to feel rather smug about just always being broke.
It is somewhat comforting to realize that I haven't lost a single dime in the ongoing financial crisis. It's a cold kind of comfort, but most days, it'll do.
posted by Devils Rancher at 6:48 PM on February 17, 2009
It is somewhat comforting to realize that I haven't lost a single dime in the ongoing financial crisis. It's a cold kind of comfort, but most days, it'll do.
posted by Devils Rancher at 6:48 PM on February 17, 2009
Well, the risk is you could lose your job, which could be quite expensive :P
posted by delmoi at 6:56 PM on February 17, 2009
posted by delmoi at 6:56 PM on February 17, 2009
Like I say, it's a cold comfort.
posted by Devils Rancher at 7:29 PM on February 17, 2009
posted by Devils Rancher at 7:29 PM on February 17, 2009
Stocks are fundamentally worth the dividend income investors think they may receive by owning them. That dividend income is generated by the company producing and selling some sort of product or service with actual worth. For example, 15th and 16th century investors sharing risk by buying shares in an expedition to Calcutta in the hopes of making a profit on their investment when the ship made it back home and sold its load of spices for a profit. Ponzi schemes generate no worth.
Prezackly!
But when stocks were bought not for dividends, but because people speculated they could sell them for more, wasn't that the tipping point?
Maybe I'm using the wrong term? I don't want to argue about semantics so I'm happy to cede that point.
But when you're buying shares at PE ratios of 20 or more there's something wrong, surely? Except for population growth, new entrants, more money [eg. when Australia adopted compulsory investment for all working citizens for retirement] I can't see what sustains thesepyramid schemes markets.
posted by uncanny hengeman at 7:42 PM on February 17, 2009 [1 favorite]
Prezackly!
But when stocks were bought not for dividends, but because people speculated they could sell them for more, wasn't that the tipping point?
Maybe I'm using the wrong term? I don't want to argue about semantics so I'm happy to cede that point.
But when you're buying shares at PE ratios of 20 or more there's something wrong, surely? Except for population growth, new entrants, more money [eg. when Australia adopted compulsory investment for all working citizens for retirement] I can't see what sustains these
posted by uncanny hengeman at 7:42 PM on February 17, 2009 [1 favorite]
Dammit. First para is quoting kavasa, I should have italicised.
posted by uncanny hengeman at 7:44 PM on February 17, 2009
posted by uncanny hengeman at 7:44 PM on February 17, 2009
One of the things that I really enjoy in World of Warcraft is playing with the economy- doing the buy low, sell high thing, pushing up prices, that sort of thing. It takes a bit of effort, but there's a fun little high that comes up as I make back my investment, then double it, then triple it, and I see how far I can make it go.
I imagine what it must be like to pull something that brings in real money, and in the billions, and I can only speculate that the rush must be incredible.
posted by Pope Guilty at 7:59 PM on February 17, 2009 [1 favorite]
I imagine what it must be like to pull something that brings in real money, and in the billions, and I can only speculate that the rush must be incredible.
posted by Pope Guilty at 7:59 PM on February 17, 2009 [1 favorite]
"up in the old hotel" mentioned Portfolio's earlier coverage of this which can be found here. They reference Alex Dalmady's "Duck Tales" report which can be found here (PDF via filesavr.com)
posted by pascal at 8:14 PM on February 17, 2009
posted by pascal at 8:14 PM on February 17, 2009
I find it upsetting to keep reading about these fat cats losing billions of dollars of hard earned investor capital and not once see mention made of a rocket ship made from uncut cocaine that runs on 30 year old single malt scotch.
Gimme some of that cash, watch how awesome shit gets.
posted by The Straightener at 8:15 PM on February 17, 2009 [18 favorites]
Gimme some of that cash, watch how awesome shit gets.
posted by The Straightener at 8:15 PM on February 17, 2009 [18 favorites]
Ponzi was a clever dude. I mean, here we are, decades later, and people still remember at least his name. I want a scheme named after me! If you don't hear from me for a while, I'll be quietly scheming in the background.
posted by jamstigator at 8:19 PM on February 17, 2009 [1 favorite]
posted by jamstigator at 8:19 PM on February 17, 2009 [1 favorite]
Stanford is best known in the UK for his flashy sponsorship of (what was to be) a series of cricket matches, and his dubious behaviour with the players' wives in the days before the first such match.
Ohhhhhhhhh, that Stanford. No wonder the name seemed familiar.
posted by the cydonian at 8:29 PM on February 17, 2009
Ohhhhhhhhh, that Stanford. No wonder the name seemed familiar.
posted by the cydonian at 8:29 PM on February 17, 2009
I can't believe I lost all my money to that jamstigator scheme!
posted by eye of newt at 9:10 PM on February 17, 2009 [1 favorite]
posted by eye of newt at 9:10 PM on February 17, 2009 [1 favorite]
I find it upsetting to keep reading about these fat cats losing billions of dollars of hard earned investor capital and not once see mention made of a rocket ship made from uncut cocaine that runs on 30 year old single malt scotch.
No shit! That's the most depressing part of this whole debacle. The thieves had no creativity. They just put it up their nose. Bernie Madoff stole $50 billion. Estimates on the total cost of the International Space Station range from $35 billion to $100 billion, depending on what you count and who you believe. Madoff literally could have built his own Moonraker-style supervillian space station, but he doesn't. Where did it all go? I guarantee you if I have $50 billion of ill-gotten gains, they are not bringing me in alive. At the very least, I have atomic bombs buried underneath several major cities as insurance.
Of course, maybe we don't really have Madoff. Maybe what we have is a robot.
posted by vibrotronica at 9:15 PM on February 17, 2009 [5 favorites]
No shit! That's the most depressing part of this whole debacle. The thieves had no creativity. They just put it up their nose. Bernie Madoff stole $50 billion. Estimates on the total cost of the International Space Station range from $35 billion to $100 billion, depending on what you count and who you believe. Madoff literally could have built his own Moonraker-style supervillian space station, but he doesn't. Where did it all go? I guarantee you if I have $50 billion of ill-gotten gains, they are not bringing me in alive. At the very least, I have atomic bombs buried underneath several major cities as insurance.
Of course, maybe we don't really have Madoff. Maybe what we have is a robot.
posted by vibrotronica at 9:15 PM on February 17, 2009 [5 favorites]
Sir Allen is a citizen of Antigua, which knighted him in 2006. It caused a kerfuffle in England.
So let me get this straight, he was knighted for meritorious service in establishing Caribbean tax shelters?
posted by jayder at 9:36 PM on February 17, 2009
So let me get this straight, he was knighted for meritorious service in establishing Caribbean tax shelters?
posted by jayder at 9:36 PM on February 17, 2009
He's no Bernie Madoff
Maybe more along Robert Vesco lines -- the Caribbean and foreign government connections specifically. Not to mention the apparent absconding -- although I am pleasantly imagining him climbing out of the back window of a motel à la Jerry Lundegaard.
Isn't that a title of nobility US citizens are Constitutionally barred from holding?
The Constitution actually only bars a) states from granting titles of nobility, and b) naturalized citizens from keeping them. Knighthoods are actually not generally included and many US citizens have received them including ex-Presidents.
Where did it all go?
I believe the working theory is that it was used to satisfy client liquidity requests and fake dividends. Peter to Paul, you know, so the pyramid wouldn't fall apart early.
posted by dhartung at 9:38 PM on February 17, 2009 [1 favorite]
Maybe more along Robert Vesco lines -- the Caribbean and foreign government connections specifically. Not to mention the apparent absconding -- although I am pleasantly imagining him climbing out of the back window of a motel à la Jerry Lundegaard.
Isn't that a title of nobility US citizens are Constitutionally barred from holding?
The Constitution actually only bars a) states from granting titles of nobility, and b) naturalized citizens from keeping them. Knighthoods are actually not generally included and many US citizens have received them including ex-Presidents.
Where did it all go?
I believe the working theory is that it was used to satisfy client liquidity requests and fake dividends. Peter to Paul, you know, so the pyramid wouldn't fall apart early.
posted by dhartung at 9:38 PM on February 17, 2009 [1 favorite]
Bernie Madoff stole $50 billion.
No he didn't, that's just how much money is estimated to have passed through his fund.
posted by Kraftmatic Adjustable Cheese at 9:48 PM on February 17, 2009
No he didn't, that's just how much money is estimated to have passed through his fund.
posted by Kraftmatic Adjustable Cheese at 9:48 PM on February 17, 2009
Where did it all go?
Think "Bermuda cricket." You would have to be pretty naive not to know where it went.
posted by uncanny hengeman at 10:39 PM on February 17, 2009
Think "Bermuda cricket." You would have to be pretty naive not to know where it went.
posted by uncanny hengeman at 10:39 PM on February 17, 2009
From the NYT article:
Over the years, Mr. Stanford cultivated the profile of a successful American businessman, partly by burnishing his connections with athletes.
What is it with business-types who love to jock sniff? The only thing I knew about Stanford Financial was that they seemed to elevate jock-sniffing to a corporate philosophy, which I find disgusting.
posted by jayder at 10:56 PM on February 17, 2009
Over the years, Mr. Stanford cultivated the profile of a successful American businessman, partly by burnishing his connections with athletes.
What is it with business-types who love to jock sniff? The only thing I knew about Stanford Financial was that they seemed to elevate jock-sniffing to a corporate philosophy, which I find disgusting.
posted by jayder at 10:56 PM on February 17, 2009
What is it with business-types who love to jock sniff? The only thing I knew about Stanford Financial was that they seemed to elevate jock-sniffing to a corporate philosophy, which I find disgusting.
In my limited experience it should send up a GIANT red flag. The amount of dodgy failed businesses that have sport sponsorship deals seems to be many in recent times.
Take this crook, for instance. He was running an investment scheme. He was also running a touring car team. Was I the only one thinking: "Hang on. V8 touring cars teams cost a shitload of money. Has he really got investors' interests at heart?"
Not sure if it's a peculiar Oz thing, but a lot of gangsters are ALSO into jock sniffing.
BTW, in both instances I can 100% understand the why from the criminals' PoV. But I don't understand why investors don't see it as a huge danger sign.
posted by uncanny hengeman at 11:20 PM on February 17, 2009
In my limited experience it should send up a GIANT red flag. The amount of dodgy failed businesses that have sport sponsorship deals seems to be many in recent times.
Take this crook, for instance. He was running an investment scheme. He was also running a touring car team. Was I the only one thinking: "Hang on. V8 touring cars teams cost a shitload of money. Has he really got investors' interests at heart?"
Not sure if it's a peculiar Oz thing, but a lot of gangsters are ALSO into jock sniffing.
BTW, in both instances I can 100% understand the why from the criminals' PoV. But I don't understand why investors don't see it as a huge danger sign.
posted by uncanny hengeman at 11:20 PM on February 17, 2009
I like how the "sir" part of his name was given to him by the Prince of Antigua! I mean it's not Queen Elizabeth but I suppose it will do!
posted by PeterParker at 11:50 PM on February 17, 2009
posted by PeterParker at 11:50 PM on February 17, 2009
Bernie Madoff stole $50 billion... Where did it all go?
Isn't a Ponzi scheme when you take money from new investors and give it to older investors as supposed return on their investments? You keep some for yourself, of course, but you have to hand out steady dividends time and be ready to completely cash out some investors or you will be found out. Madoff could have taken in $50 billion and handed out $49 billion as supposed return on investment. As long as he kept enough in reserve to satisfy investors who asked for cash payments, he was safe.
posted by pracowity at 11:55 PM on February 17, 2009
Isn't a Ponzi scheme when you take money from new investors and give it to older investors as supposed return on their investments? You keep some for yourself, of course, but you have to hand out steady dividends time and be ready to completely cash out some investors or you will be found out. Madoff could have taken in $50 billion and handed out $49 billion as supposed return on investment. As long as he kept enough in reserve to satisfy investors who asked for cash payments, he was safe.
posted by pracowity at 11:55 PM on February 17, 2009
The fifty Billyun wasn't a net sum. (what was the net sum?)
What baffles me in all this is that Madoff is still alive. Don't get me wrong, I personally don't wish either him or SirSpauldingStanford any harm, but if I'd lost millions and was pretty much bust, I'd be uh real angry. Reflecting on some of the wealthy/insane people I've had occasion to meet, I'm just surprised Madoff's still alive.
posted by From Bklyn at 12:56 AM on February 18, 2009
What baffles me in all this is that Madoff is still alive. Don't get me wrong, I personally don't wish either him or Sir
posted by From Bklyn at 12:56 AM on February 18, 2009
Yeah, Madoff was running a classical Ponzi scheme. As long as the bottom of the pyramid keeps widening with suckers, you're doing just fine.
This guy was a little different. An asshat and a fuckwit, but a little different in the operational area.
posted by bardic at 12:58 AM on February 18, 2009
This guy was a little different. An asshat and a fuckwit, but a little different in the operational area.
posted by bardic at 12:58 AM on February 18, 2009
Stanford - small change
This is a 'fraud' bigger than Madoff.
posted by adamvasco at 1:54 AM on February 18, 2009
This is a 'fraud' bigger than Madoff.
posted by adamvasco at 1:54 AM on February 18, 2009
How much money would it cost to have these guys killed? I'm pretty sure people would be willing to invest in that fund.
posted by orme at 5:50 AM on February 18, 2009
posted by orme at 5:50 AM on February 18, 2009
Whatever you do, DO NOT watch the Frontline episode tonight.
Seriously. I've always assumed that Paulson and Bernanke were just stumbling from crisis to crisis and not addressing the problem in any coherent way. Now I know for sure. Paulson comes across as particularly clueless.
posted by diogenes at 6:33 AM on February 18, 2009
Seriously. I've always assumed that Paulson and Bernanke were just stumbling from crisis to crisis and not addressing the problem in any coherent way. Now I know for sure. Paulson comes across as particularly clueless.
posted by diogenes at 6:33 AM on February 18, 2009
orme How much money would it cost to have these guys killed? I'm pretty sure people would be willing to invest in that fund.
Orme, considering that many of Stanford'ssuckers "investors" are wealthy Colombians and Venezuelans who wanted to hide their possibly ill-gained stashes in opaque offshore banks, I'd be surprised if that fund wasn't already up and running...
In fact, I'd say that Stanford is possibly on the run of something far more unpleasant than a SEC enquiry (if he has not already been turned into sharkbait)
posted by Skeptic at 7:10 AM on February 18, 2009
Orme, considering that many of Stanford's
In fact, I'd say that Stanford is possibly on the run of something far more unpleasant than a SEC enquiry (if he has not already been turned into sharkbait)
posted by Skeptic at 7:10 AM on February 18, 2009
Relating to my earlier comment, here's a WSJ article detailing Stanford's involvement in the Virgin Islands.
The tax breaks the article refers to are part of the Virgin Islands' Economic Development Company (EDC) program that is meant to stimulate investment in the VI. While it is true that the EDC program gives tax breaks to the very rich it is more restrictive than the article indicates. To qualify you must have a VI residence that you occupy at least 180 days a year, must employ x number of local people, and give x amount to local charities each year. It all looks very good on paper, unfortunately guys like Stanford have the acumen to game the system and to say that enforcement of the rules is lax is being far too kind to the corrupt bastards in charge of the program. The problem that the VI faces is that as a US territory we can't possibly compete with islands like Antigua and the Caymans which have virtually no finacial rstrictions on foreign investors.
Also, from the article Stanford is the owner of the Antiguan daily paper, which makes me fucking furious. Not only do these guys financially rape and pillage in places they know that they can get away with it but they buy up the only real source of local news so that they can suppress any dissent. I was in Antigua last year and saw the 20/20 cricket stadium that Stanford built, it is the newest most modern structure on the island and the Antiguans I spoke to were very proud to have it, but it sat empty most of the time and I saw no visible signs of comparable investment in the rest of the island's infrastructure.
posted by Bango Skank at 7:53 AM on February 18, 2009 [1 favorite]
The tax breaks the article refers to are part of the Virgin Islands' Economic Development Company (EDC) program that is meant to stimulate investment in the VI. While it is true that the EDC program gives tax breaks to the very rich it is more restrictive than the article indicates. To qualify you must have a VI residence that you occupy at least 180 days a year, must employ x number of local people, and give x amount to local charities each year. It all looks very good on paper, unfortunately guys like Stanford have the acumen to game the system and to say that enforcement of the rules is lax is being far too kind to the corrupt bastards in charge of the program. The problem that the VI faces is that as a US territory we can't possibly compete with islands like Antigua and the Caymans which have virtually no finacial rstrictions on foreign investors.
Also, from the article Stanford is the owner of the Antiguan daily paper, which makes me fucking furious. Not only do these guys financially rape and pillage in places they know that they can get away with it but they buy up the only real source of local news so that they can suppress any dissent. I was in Antigua last year and saw the 20/20 cricket stadium that Stanford built, it is the newest most modern structure on the island and the Antiguans I spoke to were very proud to have it, but it sat empty most of the time and I saw no visible signs of comparable investment in the rest of the island's infrastructure.
posted by Bango Skank at 7:53 AM on February 18, 2009 [1 favorite]
Madoff literally could have built his own Moonraker-style supervillian space station, but he doesn't. Where did it all go?
I'm 90% convinced Madoff was laundering money. Maybe one day I'll do a fpp about it.
posted by ryoshu at 8:41 AM on February 18, 2009
I'm 90% convinced Madoff was laundering money. Maybe one day I'll do a fpp about it.
posted by ryoshu at 8:41 AM on February 18, 2009
TPM has a nice photo gallery of Stanford hob-nobbing with congresspersons in Antigua.
posted by delmoi at 1:10 PM on February 18, 2009
posted by delmoi at 1:10 PM on February 18, 2009
Not only do these guys financially rape and pillage in places they know that they can get away with it but they buy up the only real source of local news so that they can suppress any dissent.
I would like to live in a world where newspeople who are dedicated to their profession simply don't sell out to the highest bidder who then proceeds to destroy everything that was good about the paper / media outlet. Would that really be so hard? To nibble on a small stream of profit doing what you love and working for an organization you can be proud of isn't as glamorous as cashing out for umptymillion bucks though. It's sad.
posted by marble at 6:41 PM on February 18, 2009
I would like to live in a world where newspeople who are dedicated to their profession simply don't sell out to the highest bidder who then proceeds to destroy everything that was good about the paper / media outlet. Would that really be so hard? To nibble on a small stream of profit doing what you love and working for an organization you can be proud of isn't as glamorous as cashing out for umptymillion bucks though. It's sad.
posted by marble at 6:41 PM on February 18, 2009
I would also like to live in that world and I would like to have a stable full of pretty ponies.
Snarkiness aside your comment is a gross oversimplification of the realities of the situation. "Newspeople who are dedicated to their profession" are not the ones who get to decide who owns the newspaper they work for. Newspapers, even small ones like the Antigua Sun or the Virgin Islands Daily News, are owned by business-people who at best see them as nothing more than another investment in their portfolios and offer little to no editorial interference. In the worst case you get guys like Stanford and Prosser who see newspaper ownership as a way to control public opinion of them and maximize profits for their more dubious revenue streams.
One of my wife's current co-workers at the VI Daily News used to work for the Nevis Sun, another Caribbean paper owned by Stanford, and she was constantly frustrated that there were major local news stories that the paper wasn't allowed to write anything about. But what choice did she have? Give up on a career that she was dedicated and passionate about and subject her children to potential poverty because she left a good-paying job? In many markets (especially in the Caribbean) there are not viable alternative news organs and we have to make do with what we have. The choices that are available for journalists in the Caribbean who want to reach an audience and have food on their table are either continue doing what they love and work their hardest covering the important stories within the confines that are set for them or give up their careers and voices completely.
posted by Bango Skank at 6:36 AM on February 19, 2009
Snarkiness aside your comment is a gross oversimplification of the realities of the situation. "Newspeople who are dedicated to their profession" are not the ones who get to decide who owns the newspaper they work for. Newspapers, even small ones like the Antigua Sun or the Virgin Islands Daily News, are owned by business-people who at best see them as nothing more than another investment in their portfolios and offer little to no editorial interference. In the worst case you get guys like Stanford and Prosser who see newspaper ownership as a way to control public opinion of them and maximize profits for their more dubious revenue streams.
One of my wife's current co-workers at the VI Daily News used to work for the Nevis Sun, another Caribbean paper owned by Stanford, and she was constantly frustrated that there were major local news stories that the paper wasn't allowed to write anything about. But what choice did she have? Give up on a career that she was dedicated and passionate about and subject her children to potential poverty because she left a good-paying job? In many markets (especially in the Caribbean) there are not viable alternative news organs and we have to make do with what we have. The choices that are available for journalists in the Caribbean who want to reach an audience and have food on their table are either continue doing what they love and work their hardest covering the important stories within the confines that are set for them or give up their careers and voices completely.
posted by Bango Skank at 6:36 AM on February 19, 2009
Charges Against Stanford a Long Time Coming, Offshore Banking Experts Say Links Stanford to Mexican Drugs Cartel. The Economist suggests this will be a fraud-infested downturn.
posted by adamvasco at 9:14 AM on February 19, 2009
posted by adamvasco at 9:14 AM on February 19, 2009
It's more than cricket he's impacted. Poor Michael Owen...
And the impact
on cricket is more than just getting rid of this winner-takes-all tournament. Some thought that Stanford might be what could save the ECB from their deal with Murdoch, and perhaps might fill the financial gaps that a switch back to the BBC could bring. Others thought he represented the worst of the IPL come directly to English cricket.
I feel sorry for the county cricket clubs in England who've benefited from the excess cash the ECB had to offer (much more than the £50K mentioned in the Telegraph article), have signed contracts and made commitments based on the money that's suddenly appeared from nowhere in the game, and now have to consider the possibility of not just handing back some of it, but that the ECB itself will have to find ways to claw it back from them to keep its own commitments. Stanford was supposed to save the county clubs from having their marquee players off playing in the IPL during crucial points of the season, by providing a lucrative incentive for them to stay playing in England. I wonder what's going to happen now that the only real money floating around the game is the IPL?
posted by Grrlscout at 11:46 AM on February 19, 2009
And the impact
on cricket is more than just getting rid of this winner-takes-all tournament. Some thought that Stanford might be what could save the ECB from their deal with Murdoch, and perhaps might fill the financial gaps that a switch back to the BBC could bring. Others thought he represented the worst of the IPL come directly to English cricket.
I feel sorry for the county cricket clubs in England who've benefited from the excess cash the ECB had to offer (much more than the £50K mentioned in the Telegraph article), have signed contracts and made commitments based on the money that's suddenly appeared from nowhere in the game, and now have to consider the possibility of not just handing back some of it, but that the ECB itself will have to find ways to claw it back from them to keep its own commitments. Stanford was supposed to save the county clubs from having their marquee players off playing in the IPL during crucial points of the season, by providing a lucrative incentive for them to stay playing in England. I wonder what's going to happen now that the only real money floating around the game is the IPL?
posted by Grrlscout at 11:46 AM on February 19, 2009
They found Stanford. He has been served papers, but he hasn't been arrested.
posted by ryoshu at 3:05 PM on February 19, 2009
posted by ryoshu at 3:05 PM on February 19, 2009
billysunday: Whatever you do DO NOT watch the Frontline episode tonight
I watched it and it wasn't anything new really -- TAL and Planet Money have been telling me the same thing since May (and really kicked it into high gear in Sept/Oct). However, hearing that they thought they country was going to devolve into martial law if the banking/credit crisis spun out of control was news to me -- heh, I guess it really was that bad.
posted by sararah at 7:15 AM on February 20, 2009
I watched it and it wasn't anything new really -- TAL and Planet Money have been telling me the same thing since May (and really kicked it into high gear in Sept/Oct). However, hearing that they thought they country was going to devolve into martial law if the banking/credit crisis spun out of control was news to me -- heh, I guess it really was that bad.
posted by sararah at 7:15 AM on February 20, 2009
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