Thursday, February 19, 2009
The fallout over the SEC's failure to uncover earlier the Stanford fraud begins. The New York Times reports that both the SEC and FINRA previously found violations at the Stanford Group, but let it off the hook with small fines. In 2007, for example, the SEC found that the firm did not meet the net capital requirements for broker-dealer firms and fined it $20,000. Over the years FINRA imposed small fines against it for various violations. SEC staff said it was looking into whether there were "red flags" that should have alerted the agency to more serious problems. NYTimes, S.E.C. Fines Didn’t Avert Stanford Group Case.
The SEC has posted at its website information for investors about the court-appointed receiver.