Allen Stanford Goes On Charm Offensive, Lays Into SEC

Allen Stanford, orange cricket fan, WAG molester and alleged perpetrator of a massive fraud, spent yesterday having a massive PR binge to try and clean up his name somewhat. He appeared on CNBC in America, and also gave interviews to Bloomberg and the New York Times from his lawyer’s office in Houston (which has some very dubious acid-fried art hanging on the walls). Maybe he wants to make up for the emotional impromptu ABC News interview he did a couple of weeks ago in which he cried, threatened to punch the interviewer, and had Billie Holiday poignantly playing in the background. 

To recap: Stanford is accused of a) taking personal loans from his company worth $1.6bn (he says they were for company investments), and b) investing clients cash in real estate and private equity ventures instead of the bonds he said he was going to invest it in. Stanford’s also the guy who was bankrolling the blinged-out Twenty20 cricket championships where the winners got $20m, and landing on the Lords crease in a helicopter, the big showoff.

He got nabbed in a civil case by SEC investigators; he hasn’t been charged with any criminal activity, yet. At the moment the SEC are getting Stanny’s second in command, James Davis, to be stool pigeon and help them follow the paper trail, building up enough evidence to indict Stanford. Stanford’s girlfriend’s mum has weighed in and called Davis “evil”.

Stanford’s now fighting back in this latest round of interviews, saying: “The SEC far overreached and basically ruined a multibillion-dollar company…Everybody got paid and everybody got made whole until the SEC came in and shut everything down”. Stanford’s accused of running a Ponzi scheme, where he used new investments to pay off old ones once he wasn’t actually making enough money to pay everyone; he’s saying here that everyone was getting paid just fine.

His story is that he got caught up in the financial crisis just like everyone else, but didn’t have the option of a government bailout. He said that people were taking out cash en masse and he had to stop them after the bank started to run dry, but that all investments were backed with assets – the SEC came in and destroyed the company when it would have survived. He calls them “jerks” who “can’t find their rear end from a hole in a ground”; on CNBC he says they came in to “literally dismember, debowel [sic]” his companies.

He’s hedging his bets though, and saying that if the bank got a bit fraudy, then it’s all Davis’s fault for not informing him about the problems. During the CNBC interview, after referring to himself in the third person, he goes onto this ridiculously unequivocal tack: “I have never done anything, to do anything, to remotely, and I mean remotely, suggest that I would defraud anybody, swindle anybody, or run any kind of Ponzi scheme. Period. The end.” OK, we get it!

Despite the New York Times portraying him as a shaking guilt-ridden neurotic, he seems pretty slick on CNBC, turning the interrogation on interviewer Scott Cohn, (who is pretty much the anti-Paxo), and also playing the “chastened billionaire” role to perfection.

Especially weird is Cohn’s psychotherapy angle (“tell me how that made you feel”) and also when he asks him about whether he was “useful” to the US authorities in the South American countries. “You talking about the CIA?”, asks Stanford, before declining to comment; in the ABC interview, Stanford doesn’t deny that he worked for the CIA, and there’s been debate that a previous SEC investigation was quashed by them. Stanford a spy? WTF? See the whole thing below.

Stanford says he expects to be indicted for something, and so do we – watch this space to see how the inevitable ends up playing out.

Posted by Ben Beaumont-Thomas in Hot Money | April 21, 2009 12:01PM |