POWER MUST ANSWER.
Case file
Stanford Group Company registers as an investment adviser and broker-dealer, respectively. | S1, section I. Distinct from the offshore bank.
Six days of fieldwork precede an examination report and enforcement referral identifying possible misrepresentations and a possible Ponzi scheme. | S1, section I. Contemporary suspicion, not a completed criminal finding.
Preliminary inquiry opens and closes. OIG substantiates a voluntary document request but no further investigative action resolving the concerns. | S1, section II.
Investment adviser examination identifies diligence concerns. | S1, section III. OIG found no evidence enforcement read the report.
Further examination finds greater CD exposure and continuing diligence deficiencies. | S1, section IV.
SEC receives the daughter's October complaint. | S1, section IV.C through E. OIG found neither a sent follow-up letter nor evidence of the intended state referral.
Additional complaints reach the SEC through Texas regulators and the NASD. | S1, section V. Allegations required verification.
Fourth examination prepares another referral and identifies possible sales and disclosure cases. | S1, section VI.
Examiners encounter leadership resistance and wait for the enforcement head's departure before forwarding their referral. | S1, executive summary.
Voluntary request sent after the bank's lawyer had already refused voluntary production. | S1, printed page 24.
New enforcement leadership decides to seek a formal investigative order. | S1, executive summary. This is not the date of the eventual lawsuit.
SEC brings its enforcement action. | S1 and S2. Later investigation differed from the earlier referral failures.
OIG report and Senate oversight hearing document failures and the SEC's responses. | S1, S2 and S4.
Stanford convicted on 13 of 14 counts, then sentenced to 110 years. | S3.
Receiver reports further distribution activity. | S5. A dated status report, not a declaration that every claimant has been paid in full.
| ID | Document | Date | Evidentiary role |
|---|---|---|---|
| S1 | SEC Office of Inspector General, Report 526 | March 31, 2010 | Principal reconstruction of examinations, referrals, internal decisions and ethics concerns. An inspector general's findings, with quoted records and testimony; not a criminal verdict against SEC employees. The PDF contains 159 pages including introductory material. |
| S2 | Senate Banking Committee hearing on the Stanford report | September 22, 2010 | Testimony from the inspector general and SEC officials, including agency acknowledgment, explanations, reform claims and questions about individual responsibility. |
| S3 | Justice Department announcement of Stanford's sentence | June 14, 2012 | Official account of verdict, sentence, money judgment and trial evidence. Its later website update date is not a new sentencing event. |
| S4 | SEC chairman Mary Schapiro's response | April 16, 2010 | The agency's stated response and account of changes since 2005. |
| S5 | Receiver's status report, docket 3629 | July 9, 2026 | Receiver's dated payment account. Filing by a party, rather than an independent audit. Figures are approximate. |
| S6 | Brian Baxter, The American Lawyer, republished by Ajamie LLP | July 22, 2014 | Secondary reporting for Barasch's 2012 civil settlement and practice suspension. The republishing law firm participated in related litigation; the article attributes the outcomes to the named publication. |
| S7 | Bloomberg report via the Houston Chronicle | October 5, 2012 | Qualification concerning Kotz's separate receiver inquiry. |
These are outbound source links. Unchecked does not host or independently authenticate these files.
| Figure | Meaning in the source |
|---|---|
| 11 percent to 13.75 percent | Combined annual interest and referral costs identified by 1997 examiners, not every depositor's yield. S1. |
| Approximately $1.1 billion in 2002 | CD exposure described in the examination of the American affiliate. S1. |
| Approximately $1.5 billion in 2004 | CDs held by the affiliate's customers, including approximately $227 million held by U.S. investors. S1. |
| More than $8 billion by 2008 | Bank's obligation to CD depositors as described by DOJ. S3. |
| $7 billion | Misappropriation described in DOJ's sentencing announcement. Different measure from deposit liabilities. S3. |
| $5.9 billion | Personal money judgment imposed at sentencing. Not cash recovered or a paid restitution total. S3. |
| Approximately $330 million | Foreign accounts the jury found forfeitable. S3. |
The article's payment figures concern S5's final plan only. No cumulative recovery percentage is calculated.
The SEC's historical response is included in the article. Khuzami acknowledged missed opportunities, accepted the recommendations and described both evidentiary constraints and possible narrower cases. Schapiro described changes since 2005. These statements were made in 2010, not in response to UNCHECKED.
The original 1997 report also preserved Stanford counsel's explanation that the owner's capital contribution came from personal money. The article does not convert examiners' doubts about that particular transaction into a separate adjudicated tracing finding.
The remaining reporting questions concern how the announced reforms were tested, what later disciplinary records establish, and whether records can document completion of promised procedural changes.
This article synthesizes official documents and limited, identified secondary reporting. Analysis about incentives, information gaps and the consequences of delay is the publication's interpretation of the cited record. No reconstructed scene, dialogue or private mental state has been invented.
The source register is not a claim that UNCHECKED independently obtained every underlying exhibit, interviewed the witnesses or reviewed the entire criminal trial transcript.
| Article claim | Support | What the evidence does not establish |
|---|---|---|
| Examiners repeatedly recognized possible fraud before enforcement meaningfully pursued it. | S1's examination chronology; S2's testimony and SEC acknowledgment. | That every employee knew every fact or that trial-level proof existed in 1997. |
| Intended referrals lacked a verifiable handoff. | S1's findings concerning the complaint and 2002 examination results. | That Texas regulators deliberately rejected a referral they never received. |
| The voluntary request in 2005 followed a known refusal. | S1's account of the lawyer's position and internal email. | That every document request sent despite anticipated resistance is improper. |
| Performance pressures influenced case selection. | S1's interviews and conclusions; S2's discussion. | A comprehensive statistical finding covering every SEC office or current practice. |
| An adviser-law theory went unconsidered. | S1's discussion of Section 206 and missing information in the briefing. | That a hypothetical court action would certainly have succeeded or saved a specified dollar amount. |
| The advertised investment strategy concealed diversion to Stanford's businesses. | S3's account of trial evidence and the verdict. | Personal knowledge or culpability of every employee or service provider. |
| Earlier SEC reluctance was not shown to result from an improper relationship. | S1 expressly states this limit; S2 records the absence of evidence of predeparture Stanford employment discussions. | That the later representation conduct was proper. |
| SEC leadership acknowledged failure and described reforms. | S2 and S4. | Independent verification that all reforms were consistently effective afterward. |
SEC examiners repeatedly suspected that Allen Stanford's offshore bank was running a Ponzi scheme. Their findings met years of resistance inside the agency. The record shows how a regulator can recognize a danger, document it and still leave investors exposed.