More misery for deposit holders
PANAMA. The collapse of the financial services empire of Allen Stanford has affected the thousands of people in the United States, Arub...
PANAMA. The collapse of the financial services empire of Allen Stanford has affected the thousands of people in the United States, Aruba, Canada and Panama.
The American billionaire has been accused of conning nearly $8 billion from investors in Texas, which caused the closure of Stanford Bank branches abroad.
Houston-based Stanford Financial Group and its subsidiaries had more than 30,000 clients, and offices around the world including one in Montreal. Regulators in Canada and several countries have shut down the local affiliates and the company put into receivership.
Panama was not the exception, and when the news of the fraud reached the country many account holders started to withdraw their money.
The general manager fearing that Stanford Bank would lose all its capital asked for help from the Panama Bank Superintendent, who immediately put the bank into administration.
The consequence of this action was that hundreds of deposit holders were unable to get any money out.
The Panama Bank Superintendent said that the accounts will be frozen for the next 30 days until the investigations of its assets are finished.
A Panama Star reader anc customer of the bank said he knows at least three businesses in Panama City that were unable to make payroll because their funds were tied up in Stanford Bank.
He added that so far nothing has been done to help the people affected by this meltdown, who do not have enough cash to pay their mortgages and other expenses.
A similar situation has been repeated in Canada, where 225 Canadians placed a total of $308 million in one of Stanford’s key holdings Stanford International Bank.
They saw they accounts frozen pending investigations and face the same problems than their counterparts in Panama.
The Antigua government is very worried about the collapse, because Stanford Bank is the biggest private employer in the island.
The Antigua-based Stanford International Bank was central to the Stanford Group.
Nigel Hamilton-Smith, a partner with the British firm Vantis Business Recovery Services said that the fact that Stanford Group operated in so many countries has not madethe task any easier.
In the United States and other places, dozen of investors have gone to court to try to recover investments or at least unlock money in accounts that have been frozen since the banks superintendents took action, but without success.
It is unlikely that the situation will change over the next few weeks as investigations continue around the world.