The burgeoning investigation of R. Allen Stanford’s fast-growing Stanford Financial Group is a story to keep an eye on. As we reported, there’s good reason for securities regulators to be skeptical of the high-yielding CDs peddled by Stanford’s offshore Antigua-based bank—Stanford International Bank.
Don’t be surprised if this story proves to have legs. And we’ll keep on it both in the magazine and here at Unstructured Finance.
But we must give a shout-out to a former financial analyst and writer who was early on the Stanford case—and that’s Alex Dalmady. Now living in south Florida, Dalmady used to be based in Venezuela. Last month he wrote an article for VenEconomia, a Venezuela-based financial publication, in which he questioned the business model of Stanford’s offshore bank and its ability to consistently pay double-the-market rates on certificates of deposit. Dalmady penned the piece after being asked to take a look at the bank by a friend who had some money with Stanford’s bank.
Dalmady says he was pretty shocked by what he found at Stanford. “I just went to the balance sheet of the bank and I said, ‘this isn’t right,’’’ says Dalmady. “They play the stock market and that’s not been doing well. Yet their results are incredible. I just don’t believe it.’’
You can get Dalmady’s piece at this site.