Stanford investors also blame U.S. government

BATON ROUGE, La. Aug 17 (Reuters) - Investors who lost their life savings in certificates of deposit issued by Allen Stanford's Antiguan bank told a congressional panel on Monday that U.S. regulators ignored warnings as early as 2003 that the accused swindler's finances were questionable.

"These agencies along with Stanford have robbed me of my American dream," Craig Nelson, a 55-year-old resident of Magnolia Springs, Alabama, testified at a U.S. Senate Banking Committee field hearing.

"I feel the U.S. government is responsible for my loss," Nelson said, words that earned a standing ovation from the audience of more than 250 Stanford investors in a crowded auditorium.

Stanford is in a Texas jail cell awaiting trial after the U.S. government charged him with 21 criminal counts related to an alleged $7 billion Ponzi scheme involving certificates of deposit issued by his bank in Antigua.

U.S. agencies including the Justice Department, Securities and Exchange Commission and Federal Bureau of Investigation, are probing the case, which has attracted the attention of U.S. politicians like Louisiana Senator David Vitter.

Leyla Wydler, a former Stanford Group financial adviser, said she came forward in 2003 with allegations that Stanford was operating a Ponzi scheme and was largely ignored by securities regulators -- including the National Association of Securities Dealers, which became the Financial Industry Regulatory Authority in 2007.

Wydler, who said she made a similar disclosure to the SEC in 2004, was hired by the company in 2000, and fired in 2002 for refusing to push the certificates of deposit (CDs) on her clients, she told the hearing.

"The financial advisers who sold CDs were praised and compensated for doing so, and those who did not sell the CDs were fired," Wydler said.

Government prosecutors allege that certificates of deposit issued by Stanford's offshore bank in Antigua were at the center of the Ponzi scheme.

The SEC has been criticized that it did not act quickly enough to shut down Stanford's alleged $7 billion fraud. The agency's internal watchdog said last month the agency's efforts to pursue Stanford were hampered by a lack of cooperation by the Texas billionaire and the head of Antigua's financial regulator.

"The system absolutely failed us and now we are left destitute, defrauded and dependent on others," said Troy Lillie, a retired Exxon Mobil refinery worker from Maurice, Louisiana.

Louisiana and Baton Rouge were hit particularly hard because because brokers from the firm targeted oil refinery workers from companies like Exxon Mobil Corp (XOM.N).

Stanford, whose fortune was estimated at $2.2 billion by Forbes magazine in 2008, has denied any wrongdoing.

Ralph Janvey, the receiver in the case who has drawn sharp criticism from Stanford investors, was invited to testify but declined, writing in a letter that his testimony may hinder the government's criminal investigation.

"This is deeply troubling to me that he is not providing more updated information," Vitter, a Republican, said at the hearing. (Reporting by Anna Driver; Editing by Tim Dobbyn)