Tuesday, February 17, 2009

Breaking Financial News

by Savannah

"Kourtin Karen" posts the following news item on her board.

Stanford Financial's Fraud Allegations Mean Less Money for Tennis Sponsorships

From the New York Times web site:

HOUSTON — The Securities and Exchange Commission accused Robert Allen Stanford, the chief of the Stanford Financial Group, on Tuesday of conducting “a massive ongoing fraud” in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. Also named in the suit were two other executives and some affiliates of the financial group.
So what does this mean in terms of tennis? Stanford Financial is the "Official Investment Adviser" of the ATP through 2011, at least according to their web site. In addition, Stanford Financial sponsors some ATP tournaments and the Outback Champions Series. Stanford Financial is also slated to be the "Host Sponsor" for the upcoming Sony Ericsson Open Tournament. Miami is considered the "Fifth Slam" in tennis circles. More tennis sponsorships lost. How do you replace them in these tough economic times? Will we see a "shrinking" of both the ATP and WTA tours due to this economic environment? Time will tell, let's see who the next major tennis sponsor is to fall on hard times.

The link to the complete NY Times article is on her site.

Reuters also reports the following:

The fraud case against Texas billionaire Allen Stanford may raise new questions about the aggressiveness of U.S. securities regulators, who according to an earlier lawsuit had begun examining the financier's sales practices in 2007 or earlier.

A complaint filed last year against Stanford's firm by two former employees contended they were aware of a U.S. Securities and Exchange Commission inquiry into the firm's sales practices while they worked there.

The employees, Mark Tidwell and Charles Rawl, said in their Texas state court lawsuit that they left rather than participate in unlawful business practices. They departed in late 2007.

They said the SEC was looking at the marketing of certificates of deposits and that the Stanford firm had purged files and destroyed documents "with knowledge of an ongoing SEC inquiry."

These high-yielding CDs were at the heart of the SEC's fraud case on Tuesday, when regulators accused Allen Stanford and three companies he runs of operating a worldwide fraud of "shocking magnitude" involving $8 billion in securities that were allegedly falsely marketed to customers.


dearg said...

He had bankrolled Cricket in the West Indies & England.

Savannah said...

So it's not only tennis that is threatened. Thanks for the intel dearg!