Secretary of State: Q & A on
Stanford Financial In the past two days, the Office of the Mississippi Secretary of State has received numerous phone calls and inquiries on the recent civil litigation regarding Stanford Group and the Securities and Exchange Commission. “Stanford Group and others have been ordered by the Federal Court to freeze its assets and provide an accounting. The Court believed there were security law violations and good cause to believe improper means were used to obtain investors funds and assets,” says Secretary of State Delbert Hosemann. “Our office immediately subpoenaed financial information and will be taking action to ensure the assets of the citizens of our State are protected. However, you should be aware this is most likely the beginning of a long process of investigation, and hopefully recovery, by Federal and State authorities.” The Office of the Secretary of State is gathering information on individual CD investors to confirm the amount invested compared to the documents supplied to us from Stanford Group under our subpoena. Affected citizens should contact the Business Regulation & Enforcement Division of the Secretary of State’s Office at (601) 359-9055. Listed below are the most frequent inquiries to our Office. Q: How many Mississippians were affected by Stanford Financial? According to documents acquired through a subpoena issued by the Office of the Mississippi Secretary of State to Stanford Financial, 4,524 Mississippians have accounts with the organization in our State, with assets totaling $390,939,148.77. Initial records obtained by Stanford Group show one-hundred forty-seven (147) Mississippians have accounts invested in Certificates of Deposit (CD’s) with Stanford Financial, in the amount of $33,577,263.82. Q: Were all Stanford financial accounts frozen? Yes. Currently, the product which is the target of the civil litigation by Securities Exchange Commission (SEC) is Stanford Financial’s high-yield Certificates of Deposit. However, the SEC has frozen all of Stanford Financial’s accounts through a temporary restraining order issued by the Federal District Court in Dallas. (Securities and Exchange Commission v. Stanford International Bank, LTD., Stanford Group Company, Stanford Capitol Management, LLC., R. Allen Stanford, James M. Stanford, James M. Davis, and Laura Pendergest-Holt) Q: When will the accounts be unfrozen? The SEC has given our Office no definitive timeline as to when the accounts will be unfrozen. However, the temporary restraining order expires on Monday, March 2, 2009 at 5:00 pm. A hearing will be held at 10:00 am that same day to determine whether the temporary restraining order will be lifted, extended or made permanent. Q: Has there been a receiver appointed? Yes. Dallas-based attorney Ralph Janvey has been appointed receiver. He has set up a website with information regarding the case at www.stanfordfinancialreceivership.com. Q: What action has the Office of the Secretary of State taken? We have subpoenaed records from the Jackson, Columbus and Tupelo offices of Stanford Group and obtained information on clients and monetary amounts involved. We have written a letter to the SEC requesting they allow our Office access to the information they are obtaining through their investigation. We are also in direct contact with SEC investigators in Fort Worth, Texas. Q: Is this a criminal matter? Currently, the Securities and Exchange Commission has only filed civil litigation against Stanford Group and Mr. Stanford, Mr. Davis, and Ms. Pendergest-Holt. Q: Should I seek my own attorney? Such representation would not interfere with the efforts of the State and we encourage our citizens to obtain proper legal and financial advice. Q: Is there State law that would help these types of issues: Yes, the Office of the Secretary of State and a special task force drafted new Securities laws for the State. House Bill 781 has passed the House of Representatives and is being considered by the Senate.
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