Back in 1989 FBI swat teams staged synchronised raids on the offices of BCCI in Florida and Washington. Members of the bank’s advisory committee, which included a string of grandees from the era, were pinned to the floor at gun-point. There were allegations of wrongdoing at BCCI that stretched from Latin America to Karachi. So how did the bank respond?

It didn’t, other than its spokesman at the time making some ludicrous comment about how Westerners didn’t understand how BCCI’s customers were secretive because they’d had to struggle for years under the repressive yoke of imperialism. The bank simply refused to engage with accusations that it was a web of lies.

Anyway, it took another two years before BCCI finally collapsed, taking the reputation of the Bank of England as de facto regulator with it. Years of court action followed and the scandal was arguably the main reason why the British central bank shed its responsibility for monitoring banks in Britain. (Yes, BCCI gave us the FSA, albeit with some time lag.)

There would appear to be parallels, at least on the surface, between the regulatory farce of BCCI and current day conundrum of Stanford Financial, the group run by Texan billionaire Sir Allen Stanford out of Antigua and Houston.

Consider the allegations that have now been tabled across the blogosphere and in the mainstream press. Anywhere between $8bn and $50bn would appear to be at risk.

If you have not done so already, read the original analysis of Sir Allen’s core operation by Venezuelan analyst Alex Dalmady here. His blog on the matter was here, but seems to have suffered a technical malfunction.

Read Bloomberg and Business Week on the matter.

Follow Felix Salmon at Market Movers, who has provided comprehensive coverage from the outset, and also Clusterstock (check the comments to various posts).

Then there’s the Wall Street Journal and the New York Times.

And what’s the response to this storm of scepticism and spiralling alarm?

Nothing. Or at least nothing more than this – an awkward, half cooked rebuttal from the hapless Stanford flak, Brian Bertsch:

We view this as the isolated opinions of one analyst in Latin America and we obviously disagree with his conclusions. The most important opinion for us is that of our clients some of whom have been with us for over 20 years and have maintained their confidence with Stanford International Bank.

If Sir Allen is innocent it’s time he stood up and told us himself. If he doesn’t it’s time some called police.

This entry was posted by Paul Murphy on Tuesday, February 17th, 2009 at 16:26 and is filed under Capital markets. Tagged with Sir Allen Stanford, Stanford Financial, Stanford International Bank. Edit this entry.