Stanford investors gather at hearing

• By BILL LODGE
• Advocate staff writer
• Published: Aug 18, 2009 - Page: 1A

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More than 400 troubled investors gave a standing ovation to Stanford Financial Group whistleblower Leyla M. Wydler as she testified Monday at a field hearing in Baton Rouge.

U.S. Sen. David Vitter, R-La., called the field hearing of the Senate Banking Committee to receive testimony from Wydler, financial regulators, a law professor and victims of an alleged fraud that exceeded $7.2 billion.

Vitter told the standing-room-only crowd at the State Police Training Academy auditorium that he called the hearing because “so many of the victims of this fraud are located in Baton Rouge.”

As many as 500 affected investors live in the Baton Rouge area, state Rep. Bodi White, R-Central, has estimated.

Texas promoter Robert Allen Stanford and several of his associates are under federal indictment in Houston for alleged conspiracy and fraud involving the sale of certificates of deposit for Stanford International Bank on the Caribbean island of Antigua.

The group is alleged by the Securities and Exchange Commission to have stolen as much as $9 billion from as many as 30,000 investors in more than 100 countries.

Stanford, 59, maintains he is innocent. He remains in custody at a detention center near Conroe, Texas.

Wydler, of Houston, described being fired in 2002 as a vice president and financial adviser for the Stanford Financial Group.

Wydler said her sin was refusing to sell certificates of deposit in Stanford International Bank.

She testified she believed those certificates of deposit were fueling a fraudulent program.

Wydler said she alleged the bank program was fraudulent in an anonymous complaint to the SEC and Financial Industry Regulatory Authority, or FINRA, in late 2003.

In 2004, she added, she made the same complaint, without resorting to anonymity, to two SEC officials at the commission’s regional office in Fort Worth, Texas.

She said she was concerned about her bosses’ promise that customers’ deposits were insured by Lloyds of London. Wydler said she later discovered that the British insurer provided liability coverage only for Stanford’s directors and officers.