ST. JOHN’S (Reuters) - Prime Minister Baldwin Spencer said on Sunday he fears the investigations into Texas billionaire Allen Stanford’s banking businesses in Antigua and Barbuda will cost the Caribbean nation jobs and damage its image.
“It is out there now that things may not be as rosy as they ought to have been with the Stanford empire and obviously for the government and people of Antigua and Barbuda it would be an area of concern because he has a reasonable amount of investment in the country,” Spencer told Reuters.
“Any major fallout with his whole set-up would I believe impact negatively on us, even from the point of view of our image, so we have some concerns there,” he said in an interview during a cricket match between the West Indies and England.
The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority are looking into Stanford Group Co’s $50 billion financial empire, including his Stanford International Bank unit in Antigua.
Regulators are probing the bank’s ability to pay high yields on certificates of deposit that it says are invested mainly in stocks, real estate, hedge funds and precious metals, many of which have lost value in recent months.
Stanford attributes the review to complaints by disgruntled former employees and describes the inspection as “routine.” He says the company is rigorously managed and fully compliant with all U.S. regulations.
Stanford has laid off staff in Antigua in recent weeks and the prime minister fears there could be more job losses.
“We are already beginning to feel it because his company has sent home close to 175 members of staff, just recently -- about three weeks ago -- and more layoffs are pending from what we understand,” said Spencer.
“The reality is that is what has happened and we can anticipate further fallout from whatever is taking place.”
The Wall Street Journal reported that the FBI has joined the investigation into Stanford but Spencer said his government had not had any involvement in any probe from the agency.
“They haven’t directly contacted (us). We have heard bits and pieces over a period of time that something might have been happening but nothing officially was drawn to the government’s attention,” he said.
“What I know is that our regulatory authority is now looking at the situation and that is encouraging in the sense that they realize that things are happening.”
Antigua’s Financial Services Regulatory Commission intends to quiz Stanford’s officials on the island, where the Texan has obtained dual citizenship.
“I think it is a situation that, in light of what seems to be happening elsewhere, that they now have to look at the internal situation.
“He operates a number of his offshore banks out of Antigua ... in light of what is happening on the international scene we have to look more closely. That signal has already been sent,” said Spencer.
The Antiguan Prime Minister has attacked Stanford in the local media as haughty and arrogant, but said the American has become a part of the local economy.
“I have had the opportunity to be critical of him at times. But I think that he has done some good things in this country,” Spencer said.
“He has been an integral part of the economy of Antigua and Barbuda for quite a while. His style, in my view, may not be the best, and sometimes he allows for difficulties to be encountered but he has contributed to the economic well being of Antigua and Barbuda.
“I am sure he would admit that this country has been pretty good to him as well,” he said.