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Posted by: Matthew Goldstein on March 13
The fight over the remains of disgraced financier R. Allen Stanford’s offshore empire is getting ugly.
A US investor is asking a court in Antigua to appoint a liquidator to wind down the operation of Stanford International Bank, the offshore bank at the heart of what US regulators say was a $8 billion Ponzi scheme.
Miami resident Alexander Fundora, in court papers obtained by BusinessWeek’s Unstructured Finance blog, says a liquidator is needed to preserve the bank’s assets, which are “at risk of dissipation at the hands of thousands of creditors seeking self-interested relief in multiple jurisdictions.” Fundora, the founder of a Miami-based home health care agency, invested $2.78 million in those now questionable certificates of deposits issued by Stanford’s bank.
The former health care executive wants the Antigua court to appoint two restructuring experts from PricewaterhouseCoopers as the liquidators. The PWC employees, according to court papers, have agreed to take on the job if the court approves.
“The US has no jurisidiction in Antigua, that’s what concerns me,” said Fundora, in an interview. He first invested with Stanford in 2006.
Still, if the court in Antigua grants Fundora’s request, it could create complications for Ralph Janvey, the Dallas lawyer serving as the court-appointed receiver for Stanford’s Houston-based brokerage firm. Janvey was appointed on Feb. 17, the same day the Securities and Exchange Commission filed civil fraud charges against Stanford and two of his top deputies. He’s supposed to be preserving assets for the thousands of investors in the US, Latin America and the Caribbean allegedly defrauded by Stanford.
Over the past two weeks, some Stanford investors had criticized Janvey for moving too slowly in unfreezing brokerage assets that had nothing to do with the offshore bank. On March 12, the receiver, in a bid to calm some of the investor anger, got the court to unfreeze some 28,000 customer accounts—about half of the estimated 50,000 accounts that Stanford Financial Group had worldwide.
Janvey also has drawn fire from more than 1,000 former Stanford employees who were fired on March 6 without any benefits or severance. Some employees claim they were told their health benefits would be continued for a while. Janvey could not be reached for comment.
Fundora’s motion also poses a challenge to the authority of London’s Vantis Business Recovery Services, the firm appointed by Antigua regulators. Fundora said Vantis may have a conflict of interest because Antigua officials have said the government owes Stanford some $100 million in loans. The 58-year-old Texas native is the largest landowner on the small Caribbean island nation.
It’s by no means clear whether Fundora will prevail in his legal motion. Nor is it known whether other investors will join with him.
But it looks like some investors simply aren’t going to wait for regulators to come up with a plan for dividing up Stanford’s assets.
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.