Stanford Group Employees Served as Members of FINRA
More revelations about the $8 billion Stanford Financial securities scam are providing clues to how the massive scam managed to stay under the radar for so long. Two employees at the Stanford Financial Group served as senior members of an advisory watchdog body that was set up to help prevent investment fraud.
In a classic case of the foxes guarding the hen house, Lena Stinson, who served as the Stanford Financial Group's director of global compliance, and Frederick Fram, chief operating officer of Stanford Group holdings, served on the membership committee of the Financial Industry Regulatory Authority (FINRA). FINRA is the largest financial regulatory body overseeing U.S. securities firms. The agency did impose fines on Stanford Financial Group for a series of violations, including falling below the minimum capital requirement. In 2007, Stanford Group was fined $10,000 for distributing marketing materials that failed to disclose both risks and benefits of CD investments in a balanced manner. When the firm fell below the minimum capital requirement for a broker, it was fined $10,000 but no further action was taken to investigate the company, even though a broker falling below the minimum capital requirement is a rare occurrence and one that should have alerted the agency to what was going on at the Stanford group. When you consider that two of the Group's employees occupied influential membership positions on the board at FINRA, you begin to wonder if there was a reason for the leniency shown to Stanford. The Stanford Group has not responded to these reports.
Allen Stanford took care to develop the right contacts and spread his sphere of influence to lawmakers and, now it seems, even to financial regulators. It's too early to say if the presence of two Stanford insiders at a financial regulatory body, established to prevent investment broker abuse, had some link to how the Stanford Financial fraud was able to remain under cover for so long. But questions are beginning to emerge about how FINRA could have been represented by members of a company that was part of the very group of investment brokers it was meant to regulate.
Stanford Financial CD Fraud
The Stanford investment scam has rocked an already shaky Securities and Exchange Commission (SEC), which oversees FINRA. While the SEC has continued to mishandle investigations, innocent investors have had their Stanford Financial Mutual Fund and CD accounts frozen by receivers.
During a crisis like this, it's important to have the expert guidance of an experienced securities attorney. If you have lost money in the Stanford investment fraud, contact a securities attorney at Arnold & Itkin LLP to understand how you can begin the process of recovering your assets.
According to insiders, nearly half of all 
Much like investors, senior employees at Stanford had limited access to the bank's investment methods themselves. At least one employee, Michael Zarich, told .jpg)
equaling the donation Stanford made to his election campaign to charity. Several lawmakers have also followed suit. According to sources, the Stanford Financial Group spent approximately $4.8 million in donations to American politicians over the past decade. Stanford worked hard to spread his influence in American politics. He, not only donated to the Obama, McCain and Clinton campaigns, but in 2002, donated heavily to Florida senator Bill Nelson who served as vice chairman of the Democratic Senatorial Campaign Committee during the time Congress was debating the introduction of harsher anti-investment fraud laws. 
The Antigua-based Stanford International Bank Limited assured clients that it’s certificates of deposit were as secure as “U.S. government insured accounts”. As SEC agents and U.S. marshals raided the company's Houston office, investors had already begun to reveal the attraction the 