It turns out Wall Street has its own version of The Dark Knight.
Securities and Exchange Commission agents raided the Houston office of Sir Robert Allen Stanford on Tuesday, charging that the knighted Texas billionaire fooled clients into pouring money into three of his companies with bogus promises of outsized returns. The SEC alleges that Stanford orchestrated a "massive" scheme revolving around $8 billion worth of certificates of deposit that promised "improbably and unsubstantiated high interest rates."
Stanford, who was served with papers by the FBI in Virginia on Thursday, offered those products through an offshore firm, Stanford International Bank, claiming that the high rates were achieved through returns from his Houston-based broker-dealer firm, Stanford Group Co.
However, the SEC says that Stanford fabricated historical return data over the past 15 years. For example, Stanford's fund reported identical returns in 1995 and 1996 of exactly 15.71%, a statistical impossibility, according to the government's complaint.
The SEC also accuses Stanford Group Co. of using fake performance data to con registered investment advisers into investing in a proprietary mutual fund wrap program called the Stanford Allocation Strategy. Those advisers forked over $1.2 billion worth of clients' money, according to the SEC.
Stanford has dual citizenship in the U.S. and Antigua and Barbuda, but lives on St. Croix in the U.S. Virgin Islands, according to his bio on Stanford Financial's Web site. He is the first American to have been knighted by Antigua and Barbuda, whose official head of state is Britain's Queen Elizabeth II, at the independent country's Silver Jubilee festival in November 2006, the bio says.
And oh what a knight he is! Just like fellow alleged fraudster Sir Bernard Madoff I, now under penthouse arrest in his castle in the sky, Stanford defrauded friends and family out of millions while living like a king on their money.
Linda Chatman Thomsen, director of the SEC's enforcement division, said the agency is "moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."
You've gotta be kidding us, Linda. Stanford was operating a multibillion dollar scam for more than a decade, and now the SEC is snapping into action?
It's no wonder the Dark Knight Stanford was able to elude justice for so long. He was dealing with a bunch of Jokers.
Dumb-o-meter score: 90 -- Holy Moly, Batman! The SEC looks foolish again.