WASHINGTON — The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a Ponzi scheme and an agency enforcement official who helped quash investigations of his business later represented the billionaire, according to the SEC inspector general.
The SEC didn’t bring charges against Stanford, alleging a $7 billion fraud, until February 2009. The SEC inspector general also says in a report released today that “institutional influence” in the enforcement division was a factor in the agency’s repeated decisions not to conduct a full investigation.
Complex cases like Stanford’s that couldn’t be quickly resolved were discouraged by enforcement higher-ups, the IG’s report says.
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