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February 12, 2009

Stanford International’s “Incredible” Returns Under Scrutiny

This story is almost beyond belief, but I suppose nothing really is anymore. The gist: An $8.5-billion investment firm has been offering certificates of deposit with anomalously high rates of return for more than a dozen years, and concerns are growing that this can’t be real.

The [Federal] agencies are investigating Stanford’s sales of certificates of deposit issued by its Antigua-based affiliate, Stanford International Bank Ltd., according to the former employees. The agency has asked former employees about the bank’s stated returns on investment, between 10.3 and 15.1 percent every year from 1995 until last year, according to documents and annual reports on the bank’s Web site. SIB has $8.5 billion in assets and 30,000 clients, according to the site.

“That type of return ignores the business cycle,” said L. Burke Files, principal of Financial Examinations & Evaluations Inc., a Tempe, Arizona-based financial investigation firm. “His returns fall outside the bell curve of probability.” [Emphasis added]

More here.

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