Stanford & Son

Posted by: Matthew Goldstein on March 11

R. Allen Stanford, charged by securities regulators with running the second-biggest Ponzi scheme on record, is refusing to testify or cooperate with the investigation launched by his accusers.

The Securities and Exchange Commission, in a court filing, revealed that Stanford has invoked his Fifth Amendment right against self-incrimination. Stanford, in a March 9 affidavit, said he will “decline to testify, provide an accounting, or produce any documents related to the matters set forth” in the SEC’s civil complaint filed against him on Feb. 17.

But Stanford isn’t the only Mexia, Texas native asserting his Fifth Amendment right. On Feb. 24, Stanford’s father, James, also invoked his Fifth Amendment right on 19 separate occassions, during a deposition taken by SEC attorney Kevin Edmundson. The 81-year-old Stanford, a former Mexia mayor and director of his son’s offshore bank in Antigua, declined to answer questions about the bank and his son’s role with it.

The elder Stanford, who hasn’t been charged with any wrong doing, told the SEC that he hasn’t seen his son since last fall. But Allen Stanford did call his father a few days before the SEC filed its complaint.

Said the elder Stanford: “He told me to go watch the paper, and that’s when I found out about this stuff. He didn’t say anything specifically what it was and that’s it.”

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BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.

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