A federal grand jury in Houston returned a two-count indictment today charging Laura Pendergest-Holt, the Stanford Financial Group Co. Chief Investment Officer, with conspiring to obstruct a U.S. Securities and Exchange Commission (SEC) proceeding investigating Stanford Financial Group, as well as a substantive count of obstructing the SEC proceeding, the Department of Justice said Tuesday.
From DOJ: According to the indictment, Stanford International Bank Ltd. (SIBL), marketed certificates of deposits (CDs). In a December 2008 monthly report, SIBL purported to have more than 30,000 clients and $8.5 billion in assets. The indictment alleges that investors were not advised of the fact that SIBL internally segregated its investment portfolio into three tiers: “Tier I,” which represented cash and cash equivalents; “Tier II,” which contained investments with “outside portfolio managers;” and “Tier III,” described as “other assets.”
Internal SIBL documents show that as of June 30, 2008, Tier III contained more than 80 percent of SIBL’s purported investments, according to the indictment. The indictment also alleges that approximately $3.2 billion of the purported Tier III value included investments in artificially valued real estate and approximately $1.6 billion included notes on personal loans to SFG “Executive A.”
If convicted on both counts, Pendergest-Holt faces a maximum of 10 years in prison and a fine of $500,000.