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Case Details:


Case Code : FINC069 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges


Scam and Scandal, Financial Scandal, Business Ethics
Case Length : 21 Pages
Period : 2009-2010
Pub. Date : 2011
Teaching Note : Not Available
Organization : Stanford Financial Group, Stanford International Bank, Stanford Group Company, Stanford Capital Management
Industry : Finance Services
Countries : US and Antigua


The case study examines the massive 'Ponzi Scheme' run by Allen Stanford (Allen), one time honored with the 'Sir' title by the Antigua government and ranked the 239th richest person in America by Forbes. Stanford was famous for his philanthropy and luxurious life style before he was caught by federal agents in February 2009 just a few weeks after an article published in VenEconomy Monthly written by Alex Dalmady. This article had raised, for the first time in 13 years (1996-2009), some very basic questions about the financials of Stanford International Bank (SIB), one of the companies run by Stanford

Later, the Securities and Exchange Commission (SEC) alleged in its complaint to the US District

Finance | Case Study in Management, Operations, Strategies, Finance, Case Studies

Court for the Northern District of Texas, Dallas Division that Stanford and his group had sold more than US$ 7.2 billion of self styled very high interest bearing 'Certificate of Deposits' (CDs) by touting that the bank was safe and strong. The bank had continuously earned double digit returns on its investment portfolio since 1992. However, experts raised questions on the functionality of the SEC which had had some suspicions about Stanford but did not take any serious action against him and his companies before the scam broke out in 2009.


Understand the events which led to the exposure of 13-year-old financial scandal
Analyze how the scam was carried out
Analyze the impact of fraud on the economy of US
Analyze the need for overhauling SEC functionality
Examine the need for overhauling the architecture of international investment
Understand the impact of fraud on investors' confidence


  Page No.
Introduction 1
Stanford Financial Group 2
Person Behind the Scam - Robert Allen Stanford 3
The Scam 4
How The Scam Was Exposed 10
Why did the scam happen? 13
The Aftermath 14
Exhibits 15


Financial Scam, Ponzi Scheme, Certificate of Deposits, Allen Stanford, Stanford Financial Group, Securities and Exchange Commission, Bernard Madoff, Stanford International Bank

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