The Stanford Group Co. office in Riverfront Plaza in downtown Richmond and all its assets have been seized by a court-appointed receiver.
A sign taped to the door yesterday on the broker-dealer and investment company's fifth-floor office stated, "This office is closed until further notice." The sign also listed a Web site: www.stanfordfinancialreceivorship.com.
Advisers in the office said last week that they expected a quick resolution so their clients could gain access to their money. The funds are invested in Pershing, an affiliated of the Bank of New York, and are insured, they said.
The local Stanford branch office, which opened last fall, had $700 million to $800 million in combined assets under management, all of which has been frozen by court order.
A local investor whose paycheck was automatically deposited last Friday into a checking account affiliated with Stanford Group said yesterday that her deposit had been reversed, but it took several days. Company assets were frozen Feb. 19. Her investments in stocks, a money market fund and an individual retirement account remain unavailable.
No one from the office was available yesterday for comment. A recorded message said the office was closed.
The local office is one of 29 broker-dealer and investment advisory firms based in Houston and controlled by Texas financier R. Allen Stanford, who has been accused of $8 billion in investor fraud.
Other Stanford Group Co. offices, including one in Charlotte, N.C., were shuttered this week as well.
The U.S. District Court, on behalf of the Securities and Exchange Commission, appointed a Houston-based receiver to take possession of the firm's assets, monies, securities and properties.
Stanford's main company is Stanford International Bank, which is in the Caribbean nation of Antigua. According to court documents filed in U.S. District Court, the bank lost at least $400,000 in connection with Bernard Madoff's alleged Ponzi scheme. Court documents allege that Stanford and James M. Davis, the bank's chief financial officer, orchestrated massive, ongoing fraud executed through companies they control, including Stanford International, Stanford Group Co. and Stanford Capital Management.
Also named in the complaint was Laura Pendergest-Holt, the chief investment officer of a Stanford affiliate.
The complaint alleges that Stanford International Bank sold $8 billion worth of certificates of deposits by promising high return rates, that it lied about its return rates and also about its portfolio.
Bank officers attempted to calm investors by claiming the bank had no exposure to Madoff's scheme, but the assurances were false, according to court records.
The bank's portfolio was not invested in liquid financial instruments, as professed in promotional material and public reports, but rather in illiquid investments, such as real estate and private equity, the court documents say.
Also, the bank tried to remove more than $178 million from its accounts in early February, documents say. It claimed to have more than 30,000 clients in 131 countries.
Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.
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