Lawmakers sharply questioned Rose Romero, the director of the SEC’s Fort Worth regional office, and Robert Khuzami, the agency’s national enforcement director, about a report from the agency’s independent inspector general.
It found that the Fort Worth compliance office decided at least four times not to act on findings by SEC staffers that Stanford appeared to be operating a Ponzi scheme.
The inspector general’s report concluded that Fort Worth SEC officials harbored suspicions that Stanford was acting illegally as early as 1997, two years after his company’s broker-dealer arm, Stanford Group Co., registered with the SEC.
Over the next eight years, the compliance branch of the Fort Worth office conducted four separate examinations of Stanford’s investments and reported each time that the high returns and low volatility were “highly unlikely” and inconsistent with a “legitimate” fund.
All four times, Fort Worth’s enforcement team chose not to act on the findings. The enforcement team first opened a formal investigation into Stanford’s company in 2005.
The SEC filed a civil fraud suit in February 2009 against Stanford and his companies, which were placed in receivership. A federal grand jury handed down the criminal indictments four months later.
Sen. Vitter asked Rose Romero why it took so long for the SEC to do something about the “suspected” fraud, one of her answers given was that “we did not think there were any American investors so it really did not concern us“.
That answer showed me that they did not – and do not – care about any victims from outside of the US… disgusting attitude. The SEC admitted that they were negligent, they admitted that they did not show Due Diligence and yet we are still not able to seek legal redress from them. The whole situation stinks.
Stanford Group Co., was registered with the SEC and the main task of SEC is to safeguard ANY investment of Stanford Group. Of course if they were not racist or if they were “really working” instead of watching porns, then this Ponzi Scheme wouldn’t affect thousands of innocent persons.