MSN Money reported that another alleged fraud has taken place (sorry, no link):
The complaint, filed in federal court in Dallas, alleges that Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — misrepresented the safety and liquidity of the CDs, which do not come with any federal deposit insurance.
The CDs were sold by Stanford International Bank through the firm’s brokerage business, which is based in Houston. Both the bank, which claims $8.5 billion in assets and 30,000 clients in 131 countries, and the brokerage unit, which operates about 30 offices in the United States, were named in the SEC suit. Stanford Financial asserts that it advises about $50 billion in assets.
While this is relatively minor in scale when compared to the Madoff affair, if allegations hold, many people may have been defrauded of some of their assets. By the mere fact that CDs were involved, I conclude that a lot of elderly investors or those with a need for income have been affected.
As an investor how can you prevent being taken? There are 2 simple steps you can take, which will avoid you being the next victim making headlines.
First, if an investment promises an above average return and it sounds too good to be true, it usually is. Don’t fall for it. This may sound obvious, but in times of low interest rates, greed can cloud judgment.
Second, all fraudulent schemes require you to send the money to a company where the assets allegedly will be invested. That’s a no-no, because you’re giving up control.
If you only follow these two simple steps, you will have all but guaranteed that fraudulent schemes won’t become a part of your life.
Comments 5
Hi Ulli,
Great article. These crooks should be taken out and shot if convicted, after an appeal of course.
L.G.
NEW STOCK MARKET TERMS
CEO –Chief Embezzlement Officer.
CFO– Corporate Fraud Officer.
BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET — A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING — The art of buying low and selling lower.
P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.
BROKER — What my broker has made me.
STANDARD & POOR — Your life in a nutshell.
STOCK ANALYST — Idiot who just downgraded your stock.
STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER — A guy whose phone has been disconnected.
MARKET CORRECTION — The day after you buy stocks.
CASH FLOW– The movement your money makes as it disappears down the toilet.
YAHOO — What you yell after selling it to some poor sucker for $240 per share.
WINDOWS — What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR — Past year investor who's now locked up in a nuthouse.
PROFIT — An archaic word no longer in use.
__________________
We'll try to cooperate fully with the IRS, because, as citizens, we feel a strong patriotic duty not to go to jail. – Dave Barry
Taxxcpa,
You beat me to it with these terms. I was going to publish them myself. Very funny…
Ulli…
Go ahead and post them. I took them from someone else’s message posted on the Drake tax software forum.
Hi,
One fellow I know calls Financial Analyst Financial ANAL-yst and Money Managers he calls Money Manglers. After the Crash of 2008-2009 so far maybe that is the appropriate name for the ones who kept their clients fully invested all the way down with that buy & hope mentality even though the market is still basically in a downtrend.
Ali