ft.com/alphaville

Sir Allen Stanford, accused by the US Securities and Exchange Commission of masterminding a $7bn Ponzi scheme, was quite proud of the honorific bestowed upon him by the Antiguan government in 2006.

To give the man his full title, he was appointed “Knight Commander of the Most Distinguished Order of the Nation (Antigua and Barbuda)”, the first American to be so honoured. (Worth noting here that he was not – contrary to a tale the businessman liked to tell, including on his now-defunct corporate website — presented with the award by “His Royal Highness Prince Edward, Earl of Wessex.”)

But it looks like Sir Allen won’t be able to brag about his knighthood for much longer.

Antiguan sources told FT Alphaville on Monday that the Texan businessman, currently in a Houston jail awaiting trial, will be stripped of his title. A recommendation to do so has been sent to the twin-island’s Governor General at the behest of the National Honours Committee.

The Governor General still has to sign the request, but this is a mere formality, and the deed is all but done. Stanford may now claim the much more dubious distinction of being the first person to have an Antiguan knighthood revoked.

The move is something of a reversal for the Antiguan  government, which up to at least March this year had stood behind the honorific.

Maurice Merchant, a government spokesman, said at the time that Stanford was quite right to continue using the title, despite the accusations against him.

“Until a conclusion of the U.S. investigations and charges lead to a conviction, we would not act upon the accusations,” Merchant said in March.

The businessman has denied all of the charges against him, and has not even been tried, much less convicted of any wrongdoing. We suspect, however, that the increasingly loud and discontented mutterings of the nation’s populace were becoming too much to bear.

Nor have the attention-seeking remarks of a coalition of investors burnt by the alleged fraud done much to help the government’s image.

The debt-ridden nation has been hard hit by the collapse of the Stanford empire and has had to seek assistance from both Venezuela and, more recently, the IMF.

The country’s administration, led by Prime Minister Baldwin Spencer, is working with the IMF to restore fiscal stability, a program which includes significant cuts to expenditure on public sector wages and salaries — some 20 per cent by 2012. The government is also expected to announce new taxes.