Odd Lots: How a Financial Analyst Did a Favor for a Friend and Uncovered a $7 Billion Ponzi Scheme

Uncovering the Allen Stanford scandal.

Allen Stanford Faces Possible Life Sentence for $7 Billion Fraud

Allen Stanford, now serving a 110-year prison sentence.

Photographer: Aaron M. Sprecher/Bloomberg

Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance, and economics.

In late 2008, the world was reeling from a global financial crisis. As markets tanked and funding became scarcer by the day, two massive Ponzi schemes unraveled. One was the $17.5 billion Ponzi run by Bernie Madoff, the other was a smaller but no less interesting scheme run by R. Allen Stanford, a flamboyant Texan who lived on the small Caribbean island of Antigua and operated a bevy of companies under the Stanford brand.

Best known for his involvement in the sport of cricket, Stanford soon found himself under a much less flattering spotlight thanks to the work of one independent financial analyst, Alex Dalmady.

This is the story of how Dalmady did a favor for a friend—and found himself uncovering a $7 billion investor fraud.

Some seven years after Dalmady's work set in motion the events that would eventually culminate in Stanford's downfall, we discuss the research note that sparked a thousand stories and whether he expects more such schemes to emerge in the wake of recent market upheaval.

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SoundCloud: Episode 17: The Analyst Whose Favor for a Pal Revealed a $7 Billion Fraud by Bloomberg Business

 

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