Did the Miami Herald Ignore Warnings Six Years Ago About Stanford Ponzi Scheme?
|via Liz Lomax 3D Illustrations, for Texas Monthly|
According to several hundred pages of SEC files obtained by Fox Business News, a Stanford insider sent a letter in 2003 calling the firm a "massive Ponzi scheme."
The letter, which you can read in its entirety here, was sent to the SEC, the Senate, Bear Sterns, and three newspapers -- including the Herald. None of the three acted on the tip, which in hindsight, seems to nail Stanford's scheme spot on. Read some key excerpts after the jump.
The damning letter -- signed "Sincerely yours, INSIDER" -- predicts almost word-for-word the charges the SEC would file six years later against Stanford International.
Stanford Financial is the subject of a lingering financial fraud scandal perpetuated as a "massive Ponzi scheme" that will destroy the life savings of many, damage the reputation of all associated parties, ridicule securities and banking authorities, and shame the United States of America.Hey, sounds like a great description of the past six months of American history!
The letter goes on to question whether the company's CDs are actually invested in anything and waves a number of red flags, like the fact that the bank had never been audited by a U.S. firm and that returns were ridiculously high.
The letter ends with a line that seems aimed right at the Herald, along with the Wall Street Journal, Washington Post, and all the regulators who seem to have tossed this warning into the trash can:
Overlooking these issues and not thoroughly investigating them is becoming an accomplice to any wrongdoing.