Monday, February 23, 2009

Too Good To Be True

Moving into the manor this week is R. Allen Stanford. He'll be bunking with the manor's first resident, Bernie Madoff. They have a lot in common and should get along just fine.

Like Madoff, Stanford is accused of bilking investors of billions. His toll is expected to be around $8 billion dollars affecting as many as 50,000 investors. His modus operandi was promising investors impossible returns. It would seem that there really are things that are too good to be true.

What is interesting about the Stanford case is that there may be a lot of collateral damage. Not from the investor list, but with whom Stanford could call associates. Apparently, Mr. Stanford has some contacts with Washington and it will be interesting to see who gets some heat for any possible association. Already mentioned are several campaigns, including Obama's presidential campaign, John McCain and fellow Texan John Cornyn, among others. I wonder if any of them are potential future residents. Stewart Parnell needs a roommate.

Also under scrutiny is the Securities and Exchange Commission (SEC) who apparently allowed Stanford to continue to operate even though he was high on their list to scrutinize and that they (the SEC) only stepped up an investigation after the Madoff story came to light.

The FBI finally found Stanford serving him court papers that declare the SEC suing him for perpetrating a "massive and continuing fraud". Why the 239th richest American (worth $2.2B), who is a distant relative to the founder of Stanford University, would defraud that many people is beyond me, but he still sounds like the perfect new resident to our little hall of shame.


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