Las víctimas olvidadas de Stanford ahora disponible en español

Las víctimas olvidadas de Stanford, ahora disponible en español en:

http://victimasolvidadasdestanford.blogspot.com/

Thursday, June 19, 2014

THE DERAILMENT OF THE SEC – PART V: WHY A RESPECTED LAW FIRM ALLEGEDLY RISKED BREAKING THE LAW BY REPRESENTING A ROGUE BILLIONAIRE BANKER

By Murray Waas

R. Allen Stanford—the billionaire fraudster and cricket enthusiast—with some cricket players in 2008. Photo by Brian Smith/Corbis Outline

A former Securities and Exchange Commission official and his law firm sought millions of dollars in new legal business in 2006 from financier R. Allen Stanford—during the same period of time the law firm had agreed to defend Stanford before the SEC, despite warnings from the SEC’s ethics counsel that any such representation would be illegal.
Stanford lavished lucrative legal business on former SEC enforcement officer Spencer C. Barasch and the Houston law firm of Andrews Kurth, where Barasch is a partner, to persuade them to defend him before the SEC. Initially, in 2005, Barasch and Andrews Kurth turned Stanford down when he asked them to represent him before the SEC, telling him that to do so would violate federal conflict-of-interest laws. In 2006, however, Barasch ignored the legal prohibition and agreed to do so anyway.
Confidential Andrews Kurth billing records show that in 2006, while Stanford was pressing Barasch and Andrews Kurth to defend him before the SEC, Stanford hired the law firm to represent him on seven other legal matters, adding an eighth in 2007. In addition, according to a former Andrews Kurth employee, Barasch told his fellow partners that they stood to earn as much as $2 million a year for defending Stanford before the SEC. Previously, Stanford had been only a relatively modest client for the law firm. Barasch and Andrews Kurth declined to comment for this story.
As the former chief enforcement officer of the SEC’s Fort Worth regional office, Barasch had overseen the agency’s monitoring of Stanford’s bank and brokerages. Between 1998 and 2005, Barasch had personally quashed six separate investigations of Stanford, according to government records. Officials at the SEC finally approved its first formal investigation of Stanford exactly one day after Barasch left the agency; examiners whom Barasch had stymied for years acted knowing they might succeed once he was gone. In 2009, the SEC and Justice Department would charge Stanford with masterminding a $7 billion Ponzi scheme, the second-largest in American history.
It was because of Barasch’s Stanford-related work at the SEC that Stanford wanted to hire Barasch so badly, according to interviews and records. Barasch had inside information on what had worked in the past to persuade his colleagues to shut down earlier investigations of Stanford. Barasch even boasted to one of Stanford’s top deputies about his access and influence with former colleagues he might be able to persuade once again, now from the outside, not to investigate the billionaire financier. Stanford was determined to do whatever he could to get Barasch “on board asap,” he wrote in an email to two of his deputies.
The 2006 SEC investigation would go on to reveal that Stanford’s international banking empire was one built on a foundation of financial fraud, deception, and bribery. It would take more than a decade after SEC examiners first uncovered evidence that he was engaged in a Ponzi scheme for Stanford to face criminal charges brought by a federal grand jury and the SEC. Stanford would be convicted by a federal jury in June 2012 and sentenced to a 110-year term in federal prison.
The new information in this story—that Stanford awarded Andrews Kurth with eight new legal representations while trying to persuade them to defend him before the SEC—provides the first explanation of why Barasch and Andrews Kurth would risk violating the law—and the consequences of doing so. A former employee of the firm told me that the prospect of lucrative legal work played a role in persuading some of the firm’s partners to ignore the law, and Andrews Kurth’s billing records, confidential emails, and other documents appear to partially confirm this.
The Full Article can be read here.

For a full and open debate on the Stanford receivership visit the Stanford International Victims Group - SIVG official Forum http://sivg.org.ag/


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