Here are some of the amended allegations in the SEC’s filing, emphasis ours:
34. Contrary to SIB’s representations in the brochure about depositor security, SIB made, with Davis’s knowledge, at least $1.6 billion in undocumented “loans” to Stanford. These undocumented loans were never disclosed in SIB’s financial statements or other communications with investors.

35. In an effort to conceal their fraud and ensure that investors continued to purchase the CD, Stanford and Davis fabricated the performance of SIB’s investment portfolio.

36. In SIB’s Annual Reports, SIB told investors that the bank earned from its “diversified” investments approximately $642 million in 2007, and $479 million in 2006.

37. SIB’s financial statements, including its investment income, are fictional. 

40. In its December 2008 Monthly Report, SIB told investors that the bank had received a capital infusion of $541 million on November 28, 2008.

41. This representation was false. SIB did not receive a capital infusion of $541 million. Instead, Stanford contributed to SIB equity interests in two pieces of real estate that the bank already owned. The real estate was valued at approximately $88.5 million when acquired 

54. On January 10, 2009, Stanford, Davis and Pendergest-Holt spoke to SIB’s Top Performer’s Club in Miami, Florida.

55. During the meeting, Davis stated that SIB was “stronger” than at any time in history. Stanford, Davis and Pendergest-Holt representedthat SIB was secure and built on a strong foundation, and that its financial condition was shored up by capital infusions.

56. But Davis failed to disclose that he had been informed only days earlier by the head of SIB’s treasury that, despite their best efforts to liquidate tier two assets, SIB’s cash position had fallen from the June 30, 2008 reported balance of $779 million to less than $28 million. 

57.  Stanford and Davis failed to disclose to the attendees that: (i) they had invested SIB funds in a manner inconsistent with offering documents and its own financial statements and (ii) the November 28, 2008 capital infusion was a fiction.

This entry was posted by Stacy-Marie Ishmael on Friday, February 27th, 2009 at 19:37 and is filed under Capital markets. Tagged with james davies, Laura Pendergest-Holt, Sir Allen Stanford, Stanford Capital Management, stanford group company, Stanford International Bank. Edit this entry.