Lawyer Bolted From Stanford, Sparking $8B SEC Action

A Washington attorney who represented R. Allen Stanford’s Antigua-based bank quit his post and recanted testimony to investigators last week, sparking the SEC’s public accusations of “massive, ongoing fraud,” Bloomberg reports. Stanford is suspected of misrepresenting the safety of $8 billion invested with his various financial entities. Thomas Sjoblom “disaffirmed” his comments to regulators days before they moved on Stanford.

“The attorney’s withdrawal is a massive red flag” that “screams fraud,” one expert said. “If the SEC hadn’t turned up the heat by that point, it did then.” Another tipoff to the feds came directly after cousin-in-crime Bernie Madoff’s fraud came to light. A day after Madoff’s arrest, the firm managing wire transfers for Stanford’s companies declined to continue the work because of suspicions about the accuracy of its reported returns. (More Robert Allen Stanford stories.)