(versión en español, en blog de venepirámides)
(Disclaimer: this is not legal advice…just my opinion)
I thought I was finished with this Stanford thing, but I have been getting emails with questions, so it’s better that I answer them here and everyone can read them. Let’s go case by case.
If you are the holder of an UNPAID Stanford International Bank LTD Antigua CD.
You do NOT need a lawyer. The bank in Antigua is in receivership and they are trying to collect as many assets as possible. The receiver in Antigua (Vantis) will be the one paying you eventually. You should keep track of the information that is coming out of Antigua and be patient. But please be realistic. There is not going to be much to distribute. My colleague at devilsexcrement had initially hoped maybe 10-20%, but now estimates 5% at most (more like 3%, if I read correctly). I’m afraid I must agree. The “investments” we know about aren’t worth much, and even if personal assets (jets, art, etc.) can be collected, much of it may go to fill in black holes elsewhere. For example, Stanford Financial may end up needing money, rather than supplying it. The bank franchises in Antigua, Venezuela and Panama have been taken over by the respective authorities. Even if they are re-sold, it is unlikely any money trickles back to the Antigua receiver.
Apparently the going rate for these lawyers is 40% of what is collected plus expenses.
Those expenses may turn out to be larger than any recovery. Some are going around claiming that they will be able to recover 40% of your investment. If they are so convinced, tell them to “buy” your claim for 20% and see the reaction. Not so enthusiastic anymore? I thought so.
In any case, ask what exactly do they plan to do. Sue SIBL? Sue your advisor? Sue the Antiguan Government? Maybe I’m missing something but I don’t see how a lawyer will put your claim ahead of the others.
The receiver in Antigua doesn’t think you need a lawyer either. Read the FAQ. Particularly the last one.
If you are the holder of a FROZEN Stanford Financial account and have never held an Antigua CD.
You do NOT need a lawyer. You need some patience. Your account will be thawed as soon as Mr. Janvey (the US receiver) verifies you have never had an Antigua CD. You do need to find a place to take your money because it can’t stay at Stanford, so start looking around.
If you want to sue Mr. Janvey for hardship, cost of opportunity, well go ahead. Remember that a judge has approved his actions.
If you are the holder of a FROZEN Stanford Financial account and have held an Antigua CD in the past.
You may think you were lucky to get out of Antigua, but unfortunately Mr. Janvey wants your money. If the interest you collected was part of Mr. Stanford’s fraud, you (according to this theory) are the beneficiary of “fraudulent conveyance” and need to return that “profit”. I’m not saying I agree with this, but apparently Mr. Janvey wants to do this.
If he does, you will be one of many affected. I would expect some sort of class action. You should probably join.
How far Mr. Janvey wants to take the “conveyance” principle is also a matter of speculation, because theoretically he could ask St. Jude Hospital to give back the Stanford donations or preferably for Mr. Stanford’s ‘acquaintances” or family to give back their Christmas presents. We’ll have to wait and see. For now he wants the Stanford accounts, because that is what is at his disposal. It may not be fair, but that is what it is.
If you are a past Antigua CD holder, lucky enough to not be anymore.
If you are outside of the US, you probably do NOT need a lawyer. I really don’t see how the Antiguan receiver can get at your assets for the “conveyance” thing, unless you have assets in Antigua. In the US, Mr. Janvey would have to find you first and unless the US firm has the records of all the Antigua CD holders, that won’t be easy to do.
Keep in mind, that people will be looking for money, and they may just want yours. So keep your options open, In any case, this will take some time, and no “conveyance” claims have been made yet in the Madoff case, as far as we know.
If you are a Stanford Advisor who didn’t sell Antigua CDs
You probably don’t need a lawyer, unless Mr. Janvey decides to collect those upfront “advances’ some of you received for bringing your business over to Stanford. I don’t see that case, but with these things you never know.
Keep your Rolodex, though. Good odds is that your clients may still like you and could even take their accounts to wherever you end up and keep you as an advisor.
If you find a new place, though…this time check it out better before signing on.
If you are a Stanford Advisor who sold Antigua CDs
You probably need a lawyer. Not to protect you from investor lawsuit, there is a 1994 Supreme Court decision that deals with that (or so I’m told). However, I could expect “fraudulent conveyance” to extend to the commissions and prizes that were paid for selling these CDs. If, on top of that, your assets are at Mr. Janvey’s disposal (frozen), I’d think he might want some of that. Besides a lawyer, maybe a career counselor would be good. There is a future for you in sales, but not so sure if in finance.
In any case, it always is a good policy to “know your client”, because they may be looking to know you better, after finding out that their Antigua CDs aren’t worth much anymore. Be careful.
If you are a Stanford Insider
You know you need a lawyer, but you already probably have the best other people’s money can buy.
Showing posts with label dalmady stanford Allen International SIBL Madoff Markopolous Ponzi. Show all posts
Showing posts with label dalmady stanford Allen International SIBL Madoff Markopolous Ponzi. Show all posts
Wednesday, March 11, 2009
Thursday, March 5, 2009
Jon Stewart - Financial Analyst
Mr Stewart has proven that not only is he a brilliant comedian, but an illuminated financial and market analyst.
Here is an invitation to watch last night's "Daily Show" (follow the LINK). It may be the best 21 minutes you ever invested.
LINK
You will understand WHY I am a fan.
(Oh...and Stanford is on it too)
Here is an invitation to watch last night's "Daily Show" (follow the LINK). It may be the best 21 minutes you ever invested.
LINK
You will understand WHY I am a fan.
(Oh...and Stanford is on it too)
Tuesday, March 3, 2009
Stanford vs. Stanford
This is just to clear up some concepts, especially for the friends in media and some of the readers who may be confused. I really should be getting off the case, soon.
There are several “Stanford” institutions being mentioned these days, so it’s important to try to separate and clarify.
Stanford International Bank (Antigua) is the center of the controversy and where everything started. This is the “CD” issuer and where the $8 billion (more or less) portfolio seems to be missing. There are 28.000 account holders very upset at this bank.
Stanford Group Company, based in Houston, is NOT a bank. It (and its subsidiaries) is a broker-dealer and investment advisor, along the lines of a Raymond James (with our apologies to the good people at RJ). It also has accounts, about 35.000 of them.
SGC, however, does NOT have custody of the securities or cash in these accounts. These are kept at Pershing, J.P. Morgan Clearing and others. SGC and its team of advisors and brokers just “managed” these assets, that is gave orders to buy/sell or whatever.
So these assets are “safe” and the holders of these accounts (including Johnny Damon, my mistake) have not lost their money (unless they had Antigua CDs…of course). But these accounts are currently “frozen”, as in the holders can’t make withdrawals or shift their assets to a different broker/dealer (Merrill, Morgan Stanley, etc.) at this moment. This is a bother for these people, but it should be temporary.
The value of these assets is also a good question, since SGC has claimed to have $50 billion “under management”. Given the “numerical enhancement” ability of the Stanford PR team, that would seem to be an overstatement. Why is this important? Read on.
SGC is owned by Mr. Stanford directly, presumably bought or established somehow with money originating in Antigua (compensation or “Loans”, etc.). So if this business could be liquidated or sold somehow, that money could be used to compensate the Antigua CD holders (stress the could).
The ideal scenario: sell SGC to a competitor quickly, take that money and put it in the bank to pay those CD holders.
However, the SGC receiver, a Mr. Janvey is quickly finding out that SGC is a little black hole in itself. Being an analyst, we went to see SGC’s statements. Only a balance sheet is available (no P/L) and its from 2007. But that’s good enough.
First glimpse: $85 million in equity. Hurrah! However at second look, it is not so good. The cash and “equivalents” is listed at $48 million. Normally that would be good. But in the notes we see that Mr. Stanford made a capital infusion of $7 million in SGC early 2008. Why would a stockholder put in additional capital to this company, if it had $48 million in cash and was way over regulatory net capital requirements?
The $48 million may have been there, but it was more likely an “equivalent” than cash.
Receivables from Antigua? Perhaps.
The other item that stands out is $39 million in “Advanced compensation agreements” From what we gather, SGC would pay money upfront to investment advisors/brokers for them to bring their clients’ assets to SGC. These amounts would be amortized over time, as those assets would generate fees (supposedly) for the company. If the advisor/broker left, he or she would be on the hook for this money (look up “disgruntled ex-employees”).
Basically this is money that has already been paid and never gets collected, as long as the advisor/broker works at the firm. If the firm no longer offers them a job…well I guess they may not want to pay that money back. In the current situation, this item would seem to be worthless.
The buildings have mortgages, the equipment is leased, you get the idea.
How about the intangibles? Although numbers are lacking, referral fees from Antigua made up a good part of SGC income. It did generate income from its internal business, but that would not suffice to sustain its current structure. You may not be able to give the company away.
That leaves the 35,000 accounts and Mr. Janvey’s headache. He would love to be able to “sell” or assign this business to another broker/dealer investment advisor. But this isn’t quite as clear-cut as when Barclays purchased Lehman’s business. Who are those accounts really tied to? Stanford or the advisor? Or given what has transpired neither?. No one is going to buy a business that walks out the door the first chance it gets.
Time is of the essence; the longer the accounts are frozen the more likely they are to move away once thawed. There is little or no cash to pay employees to come in and work a transition.
And there is likely to be very little left for the US receiver to distribute back to Antigua (if any at all).
Of course, the good news (if you got all this) is that the fraud still stands at around $8 billion (not $50 billion).
EDIT: The "assets under management" were estimated by the receiver at $6 billion.
There are several “Stanford” institutions being mentioned these days, so it’s important to try to separate and clarify.
Stanford International Bank (Antigua) is the center of the controversy and where everything started. This is the “CD” issuer and where the $8 billion (more or less) portfolio seems to be missing. There are 28.000 account holders very upset at this bank.
Stanford Group Company, based in Houston, is NOT a bank. It (and its subsidiaries) is a broker-dealer and investment advisor, along the lines of a Raymond James (with our apologies to the good people at RJ). It also has accounts, about 35.000 of them.
SGC, however, does NOT have custody of the securities or cash in these accounts. These are kept at Pershing, J.P. Morgan Clearing and others. SGC and its team of advisors and brokers just “managed” these assets, that is gave orders to buy/sell or whatever.
So these assets are “safe” and the holders of these accounts (including Johnny Damon, my mistake) have not lost their money (unless they had Antigua CDs…of course). But these accounts are currently “frozen”, as in the holders can’t make withdrawals or shift their assets to a different broker/dealer (Merrill, Morgan Stanley, etc.) at this moment. This is a bother for these people, but it should be temporary.
The value of these assets is also a good question, since SGC has claimed to have $50 billion “under management”. Given the “numerical enhancement” ability of the Stanford PR team, that would seem to be an overstatement. Why is this important? Read on.
SGC is owned by Mr. Stanford directly, presumably bought or established somehow with money originating in Antigua (compensation or “Loans”, etc.). So if this business could be liquidated or sold somehow, that money could be used to compensate the Antigua CD holders (stress the could).
The ideal scenario: sell SGC to a competitor quickly, take that money and put it in the bank to pay those CD holders.
However, the SGC receiver, a Mr. Janvey is quickly finding out that SGC is a little black hole in itself. Being an analyst, we went to see SGC’s statements. Only a balance sheet is available (no P/L) and its from 2007. But that’s good enough.
First glimpse: $85 million in equity. Hurrah! However at second look, it is not so good. The cash and “equivalents” is listed at $48 million. Normally that would be good. But in the notes we see that Mr. Stanford made a capital infusion of $7 million in SGC early 2008. Why would a stockholder put in additional capital to this company, if it had $48 million in cash and was way over regulatory net capital requirements?
The $48 million may have been there, but it was more likely an “equivalent” than cash.
Receivables from Antigua? Perhaps.
The other item that stands out is $39 million in “Advanced compensation agreements” From what we gather, SGC would pay money upfront to investment advisors/brokers for them to bring their clients’ assets to SGC. These amounts would be amortized over time, as those assets would generate fees (supposedly) for the company. If the advisor/broker left, he or she would be on the hook for this money (look up “disgruntled ex-employees”).
Basically this is money that has already been paid and never gets collected, as long as the advisor/broker works at the firm. If the firm no longer offers them a job…well I guess they may not want to pay that money back. In the current situation, this item would seem to be worthless.
The buildings have mortgages, the equipment is leased, you get the idea.
How about the intangibles? Although numbers are lacking, referral fees from Antigua made up a good part of SGC income. It did generate income from its internal business, but that would not suffice to sustain its current structure. You may not be able to give the company away.
That leaves the 35,000 accounts and Mr. Janvey’s headache. He would love to be able to “sell” or assign this business to another broker/dealer investment advisor. But this isn’t quite as clear-cut as when Barclays purchased Lehman’s business. Who are those accounts really tied to? Stanford or the advisor? Or given what has transpired neither?. No one is going to buy a business that walks out the door the first chance it gets.
Time is of the essence; the longer the accounts are frozen the more likely they are to move away once thawed. There is little or no cash to pay employees to come in and work a transition.
And there is likely to be very little left for the US receiver to distribute back to Antigua (if any at all).
Of course, the good news (if you got all this) is that the fraud still stands at around $8 billion (not $50 billion).
EDIT: The "assets under management" were estimated by the receiver at $6 billion.
Thursday, February 26, 2009
In Defense of Stanford
Several media outlets have now upped the tally on the alleged Stanford fraud from $8 billion (which is approximate) to $9.2 billion. We must come to the defense of Stanford on this one. It's really just $8 billion from the Antigua Bank (so far).
The other $1.2 billion arise from another part of the SEC Complaint which refers to a Mutual Fund Wrap program that Stanford Financial started in 2005. For those who don't know, a mutual fund "wrap" is like a Fund of Funds for mutual funds. Invest in one and you diversify over a series of mutual funds, each of which is supposedly also diversified. Double your diversification and double the fees you pay also.
Stanford Financial isn't accused of missappropriating (stealing) that $1.2 billion, but of misrepresenting the performance of the program. The program started in 2005, but Stanford already had a track record, which apparently was carefully "made up". And as they operated this program, they also "enhanced" the returns they were actually made. So the $1.2 billion should still be there for investors, but the $25 million they collected in fees...that maybe they shouldn't have.
This is also what the "disgruntled employees" were complaining about. (I was always wondering about that)
So why would Stanford set up a program like that and fudge the numbers to make a measly $25 million. Well, they brought a lot of advisors on board with it and those advisors were encouraged to...you guessed it...sell Antigua CDs.
I guess it shows where Stanford's real strength lied: in making up numbers.
Someone joked that the much ballyhooed "Stanford Investment Model" (SIM), actually stood for SIMulated.
The other $1.2 billion arise from another part of the SEC Complaint which refers to a Mutual Fund Wrap program that Stanford Financial started in 2005. For those who don't know, a mutual fund "wrap" is like a Fund of Funds for mutual funds. Invest in one and you diversify over a series of mutual funds, each of which is supposedly also diversified. Double your diversification and double the fees you pay also.
Stanford Financial isn't accused of missappropriating (stealing) that $1.2 billion, but of misrepresenting the performance of the program. The program started in 2005, but Stanford already had a track record, which apparently was carefully "made up". And as they operated this program, they also "enhanced" the returns they were actually made. So the $1.2 billion should still be there for investors, but the $25 million they collected in fees...that maybe they shouldn't have.
This is also what the "disgruntled employees" were complaining about. (I was always wondering about that)
So why would Stanford set up a program like that and fudge the numbers to make a measly $25 million. Well, they brought a lot of advisors on board with it and those advisors were encouraged to...you guessed it...sell Antigua CDs.
I guess it shows where Stanford's real strength lied: in making up numbers.
Someone joked that the much ballyhooed "Stanford Investment Model" (SIM), actually stood for SIMulated.
Wednesday, February 18, 2009
Stanford: Who Knew What When
I hope this is my last “inside” story about Stanford. The story is moving ahead, as it should, and this is yesterday’s news.
I finally got around to reviewing the SEC complaint about the Stanford group and IMHO it is excellent work. It’s all there, the numbers add up, the language is unequivocally strong, and they have many facts I didn’t have. Plus there is a whole different angle to it also, with marketing and mail fraud, if I understand the complaint correctly (I’m not fluent in legalese). Please don’t discard that angle. Mail fraud is a serious offense and multiple counts will put you away for a long time. Those may turn out to be the only charges that actually stick. I think we all recall what Capone went down for. Does anyone have a problem with that?
So where and when they got their leads on this is irrelevant. They were obviously on to this operation in some form or fashion. If they were on to the Ponzi lead independently, kudos. If they plucked the “duck” off the net, recognized the value of the work I did, ran with it to complement their case in a few days, well double and triple kudos. Trolling for tips is exactly what these guys need to do. Kudos for that, too. There is a LOT of stuff going up right on the web right now. Pull it in, check it out, and get these guys.
Unlike Markopoulos, I did not take my data to the SEC. Hence; I have no grounds to judge their performance regarding the investigation. I threw it out there to see where it would stick and maybe save somebody some money or grief this time or next.
A few more issues here. This is NOT Madoff. Stanford International Bank is not a US company. They don’t list securities on US markets. They are not FDIC or SIPC insured.
They have NO obligation to file their financials with the SEC, as far as I know. And even if they do, the SEC cannot run an inspection in Antigua or request documents unilaterally. We’re talking borders, here, governments and jurisdictions. And even “cooperating” can be dicey, you don’t know who is with whom.
As it concerns my research, if SIBL hadn’t brazenly put their financials up on the web, I’d have nothing. There are actually banks out there that show nothing. Who knows what that is about? So transparency is the key to stopping these things.
Like all scams, there is KNOW, SAY and PROVE. I KNEW. I wasn’t just fishing out there with “Duck Tales”. I had what was there, which was plenty, but I also had lots of little subtle clues that didn’t go into the article. Stuff you get from reading hundreds of these things. I’m proud of that. I SAID, in my own ducky wimpy way, hiding behind Heisenberg. I’m proud of that. VenEconomy SAID without knowing everything I knew and that is why Toby Bottome is a great man. The SEC KNEW and moved to PROVE. That’s their job. Well done.
(I have a REAL problem with KNEW and SHUT UP, but that’s another rant).
The Madoff story blew the cover off all of our eyes. The SEC’s too. Maybe you haven’t noticed all the mini-Madoff’s running around out there and ditching their Cessnas to hide. I have. Who exactly do you think they are running from? It’s not from “disgruntled employees” I can assure you. Go get ‘em, guys.
These guys need help to whisk these guys out and clean this up. Sounds like a job program for ex-Wall Streeters if you ask me. Anyone see the epilogue to “Catch Me If You Can?”
P.S. Food for my big head. My daughter says I am now World Finance’s “Man of the Year”. Something about an “Elder Wand” that Harry Potter fans will get. LOL
I finally got around to reviewing the SEC complaint about the Stanford group and IMHO it is excellent work. It’s all there, the numbers add up, the language is unequivocally strong, and they have many facts I didn’t have. Plus there is a whole different angle to it also, with marketing and mail fraud, if I understand the complaint correctly (I’m not fluent in legalese). Please don’t discard that angle. Mail fraud is a serious offense and multiple counts will put you away for a long time. Those may turn out to be the only charges that actually stick. I think we all recall what Capone went down for. Does anyone have a problem with that?
So where and when they got their leads on this is irrelevant. They were obviously on to this operation in some form or fashion. If they were on to the Ponzi lead independently, kudos. If they plucked the “duck” off the net, recognized the value of the work I did, ran with it to complement their case in a few days, well double and triple kudos. Trolling for tips is exactly what these guys need to do. Kudos for that, too. There is a LOT of stuff going up right on the web right now. Pull it in, check it out, and get these guys.
Unlike Markopoulos, I did not take my data to the SEC. Hence; I have no grounds to judge their performance regarding the investigation. I threw it out there to see where it would stick and maybe save somebody some money or grief this time or next.
A few more issues here. This is NOT Madoff. Stanford International Bank is not a US company. They don’t list securities on US markets. They are not FDIC or SIPC insured.
They have NO obligation to file their financials with the SEC, as far as I know. And even if they do, the SEC cannot run an inspection in Antigua or request documents unilaterally. We’re talking borders, here, governments and jurisdictions. And even “cooperating” can be dicey, you don’t know who is with whom.
As it concerns my research, if SIBL hadn’t brazenly put their financials up on the web, I’d have nothing. There are actually banks out there that show nothing. Who knows what that is about? So transparency is the key to stopping these things.
Like all scams, there is KNOW, SAY and PROVE. I KNEW. I wasn’t just fishing out there with “Duck Tales”. I had what was there, which was plenty, but I also had lots of little subtle clues that didn’t go into the article. Stuff you get from reading hundreds of these things. I’m proud of that. I SAID, in my own ducky wimpy way, hiding behind Heisenberg. I’m proud of that. VenEconomy SAID without knowing everything I knew and that is why Toby Bottome is a great man. The SEC KNEW and moved to PROVE. That’s their job. Well done.
(I have a REAL problem with KNEW and SHUT UP, but that’s another rant).
The Madoff story blew the cover off all of our eyes. The SEC’s too. Maybe you haven’t noticed all the mini-Madoff’s running around out there and ditching their Cessnas to hide. I have. Who exactly do you think they are running from? It’s not from “disgruntled employees” I can assure you. Go get ‘em, guys.
These guys need help to whisk these guys out and clean this up. Sounds like a job program for ex-Wall Streeters if you ask me. Anyone see the epilogue to “Catch Me If You Can?”
P.S. Food for my big head. My daughter says I am now World Finance’s “Man of the Year”. Something about an “Elder Wand” that Harry Potter fans will get. LOL
Monday, February 16, 2009
How I Know, What I Know
You're probably asking yourselves how I know what I believe is going on in Antigua. I don't. But I do. That is nobody has spoken to me, but the numbers have. And here is why:
I established quite clearly in Duck Tales, SIBL has its own particular "business model". Investments, rather than loans. Highly liquid ones, supposedly.
Now if we all go to note 3.7 of SIBL 2007 financials (yes, the "official set"), called "liquidity risk" you will see that of $7.0 billion assets (the last column), $6.3 billion is listed as "up to 1 month assets". That's 90%, children.
What does that mean, boys and girls? Well if they have cash troubles NOW and even have to pull liquidity out of their investments like Transwitch (TXCC) (thanks Peabody...I'd link...but I'm a novice), they have no liquid assets. So figure it out...there's NOTHING (except those penny stocks and piecemeal here and there).
It also follows that it this wasn't a 2008 thing. Even if their portfolio was down 40% this year, according to model, they should have plenty of cash and be able to deal with redemptions.
So, our friends in Antigua are looking at the vault right now, and it's empty. Sorry kids.
Linking up and filling in the blanks.
I'll make it easy for everyone by putting my stuff up on the web. Don't call me, I'm on the donotcall list and I will report you. LOL.
Here's the Original Article "Duck Tales". As I'm told it's already linked at Sir Allen's wiki bio. Quite poetic, I'd say.
Here's the inside story of "Confessions of a Reluctant Whistleblower" on DiabloCaca's site.
Let me fill in the blanks about me and the story. These are questions the reporters asked and are probably floating around anyway.
I'm 48. Happily married (sorry girls...and err you too, sir). I'm from Venezuela, but English is my first language (long story you don't need to know). I'm a financial analyst. They're writing "Florida-based" and "independent". Both good. I work out of my house. I like that a lot. I live in Florida and Yes I did come here LEGALLY.
About the story. I have NO inside information. I found out about this as stated in "confessions".
I'm not gruntled or disgruntled ANYTHING and Sir Allen doesn't owe me money. I don't know any Stanford employees past or present. I have NOT been contacted by regulatory or law enforcement agencies BEFORE or SINCE. I don't have a lawyer, though I'm told I might need one.
I don't know Mr. Markopolous, but from what I've seen he's a pretty smart guy. However, I would much prefer to party with Sir Allen.
I did not contact the Stanford group before writing "Duck Tales". A reporter actually asked me that. But I guess the fact that I'm not dead, maimed or suddenly filthy rich should clear that up.
I did not contact or try to file something with the SEC. After seeing Markopolous' deposition, that was probably the best. I can just imagine..."File this in triplicate...sign here, we'll get back to you after we check with the company".
Now I'll actually find some news to blog about. Like Joe the Plumber, and unlike Markopolous, I have an opinion about EVERYTHING.
Is anybody reading this?
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