Stanford workers say they lost, too

• By GARY PERILLOUX
• Advocate business writer
• Published: Mar 6, 2009 - Page: 1A - UPDATED: 12:05 a.m.

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On Feb. 17, a Tuesday morning, Stanford Group Co. workers reported to City Plaza in downtown Baton Rouge for what they expected would be a full day’s work at the financial company’s eighth-floor offices.

Within hours, federal regulators who had been investigating Stanford for months obtained a temporary restraining order from a U.S. District Court judge in Dallas; Stanford offices were closed and assets seized; and the world learned that the financial empire Texas billionaire R. Allen Stanford had built included, according to Securities and Exchange Commission civil charges, some $9.2 billion in fraudulently marketed and managed financial products.

On Thursday, the first of about 30 Baton Rouge employees whose jobs are in jeopardy spoke out publicly about what happened the morning of Feb. 17 and what continues to be a nightmare for Stanford investors and Baton Rouge and Lafayette employees.

“We were in tears, because so many people had put so much into the company,” said 32-year-old Heather Drummond, a Livingston Parish resident who described the employee reaction after John Schwab, a senior vice president for Stanford’s Baton Rouge office, led the office staff in prayer before they went home.

Drummond, a Stanford client service associate, lost the ability to refinance her home mortgage because employment couldn’t be verified, and she has no pink slip to obtain unemployment insurance or interim health insurance. She’s not sure if Stanford’s health insurance is good anymore. Neither are co-workers sure, she said, who are facing chemotherapy treatments and a planned Caesarean section.

“As far as Houston and Baton Rouge and Miami (offices of Stanford), none of us here in the United States have heard anything about whether we’re employed or unemployed. … Somebody here in Baton Rouge needs to raise the issue, because we’re suffering, too,” she said.

Receiver arrives
On Thursday, button-tucked burgundy leather chairs, desk lamps and oriental rugs flowed out of the Stanford Group Co. office in downtown Baton Rouge, but money did not.

Investments booked by the Houston-based financial firm remain tightly held by a federal court-appointed official — or receiver — who still can’t say how, when or if most of the money will be returned to investors. That’s 17 days after a Securities and Exchange Commission investigation shut down 29 Stanford offices nationwide, including Baton Rouge and Lafayette sites.

On Wednesday, receiver Ralph Janvey did crack open a window of hope: He submitted a motion asking a U.S. District Court judge in Dallas to allow Stanford clients with less than $250,000 in accounts to receive their money, subject to certain conditions and subject to legal recall. If a judge OKs the motion, that money would begin flowing Monday from Pershing LLC, a clearing firm that regularly transferred money for Stanford.

On Thursday afternoon, two attorneys representing Janvey and the Stanford investigation allowed employees to re-enter Baton Rouge offices and obtain personal belongings.

“I really can’t say any more,” said Alex Brown, a partner in the Houston law office of Thompson & Knight LLP who is working for Janvey and who oversaw the employee procession.

Drummond spoke in a phone interview, but Stanford employees at the downtown office said they couldn’t talk about the investigation or their plights in a substantive way. They did address the enormity of the situation.

“It’s just a sad day,” said Ronald Clayton, a Stanford financial adviser who has worked in the investment field 35 years and who joined Stanford’s Baton Rouge office in 2005.

“It’s a sad day for Baton Rouge and a lot of people,” said a co-worker, who declined to identify herself.