Antigua regulator to quiz Stanford

MIAMI (Reuters) - Antigua and Barbuda regulators will quiz Stanford International Bank officials about issues raised in press reports, but have not launched a formal investigation of the Caribbean nation's largest bank, in part because no customers have complained, the top regulator told Reuters on Friday.

U.S. financial regulation agencies are looking into the bank's parent, Stanford Group Co, of Houston, Texas.

BusinessWeek reported that regulators were investigating Stanford's ability to pay high yields on certificates of deposit as it invests CD money largely in stocks, real estate, hedge funds and precious metals, many of which have lost value in recent months.

Leroy King, head of Antigua's Financial Services Regulatory Commission, said his agency was responding to inquiries from U.S. investigators and would meet later on Friday with officials of Stanford International.

But King said no customers have complained and no credible evidence has emerged to trigger a formal investigation. The agency's last examination of Stanford, a few months ago, raised no red flags, he said.

"It was indeed satisfactory," King said in a telephone interview. "We have no credible information coming to us to say that they are not sound."

King downplayed any comparisons to the collapse of New York money manager Bernard Madoff's financial empire, which has been called a $50 billion Ponzi scheme.

"I hope they're wrong. I think they're wrong," he said.

King said his agency had received requests for information from the U.S. Securities and Exchange Commission but declined to reveal the nature of the queries. He said regulators would be reviewing those requests later on Friday before meeting with Stanford International officials to question them.

Stanford Group, with about $50 billion in assets, is headed by Sir Allen Stanford, a Texan billionaire who is also a prominent citizen of Antigua and Barbuda. It was the tiny former British colony of about 85,000 people that knighted Stanford in 2006.

Stanford is ranked No. 205 on the Forbes list of the 400 richest Americans, with a net worth of $2.2 billion.

With liquidity an issue for most banks as a result of the global meltdown, Stanford injected fresh capital into Stanford International last year, King said.

"I know Allen Stanford personally put close to half a billion dollars of his own money to beef up the capital structure of the bank," he said.

King said there had been no reports of a run on Stanford International assets, but he would quiz bank officials later on Friday, in part due to his responsibility to protect Antigua and Barbuda's reputation.

"They are our biggest bank," he said, "but we can't let that ride over Antigua and Barbuda's name."

King declined to say what his agency would ask Stanford officials, but said regulators would "dig a little deeper" because of the suggestions made in press reports.

"It's not a Friday afternoon cocktail any more," he said. "It's taking off the gloves. We have a job to do to protect our jurisdiction."

(Editing by Pascal Fletcher)