BOGOTA (Reuters) - The Colombian arm of the Stanford Financial Group halted its activities on Colombia’s stock exchange on Wednesday due to a fraud scandal engulfing its parent company, the group’s local director said.
U.S. authorities have charged the financial group and its founder with perpetrating a “massive” fraud.
Alvaro Camaro, the director of Stanford’s brokerage operation in Bogota, said the company had sufficient solvency to provide guarantees to its local investors.
“With what has happened to the group at a global level, we had to make a decision to protect investors and naturally to guarantee stability in the market,” Camaro told Reuters.
“It’s not an intervention, it’s a decision to withdraw from activities that’s been made by the company and accepted by the Financial Superintendency because the firm has no liquidity problems,” he said.
Under the terms of its withdrawal from the market, Stanford’s local operations will be limited to fulfilling outstanding commitments in the stock market and returning funds to its clients, the Superintendency said in a statement.
Stanford’s net assets in the Andean country are valued at about $10.9 million.
“We have a $7.8 million in ready funds, which is very robust and enough for us to respond to those people who want to transfer their funds elsewhere,” Camaro said.
In a complaint filed in federal court in Dallas, the U.S. Securities and Exchange Commission accused billionaire Allen Stanford of fraudulently selling $8 billion in high-yield certificates of deposit in a scheme that stretched from Texas to the Caribbean.
Panamanian bank regulators said on Tuesday that they had taken over the local affiliate of the organization, while Stanford Bank Venezuela sought to calm its clients by saying its assets were not linked to Stanford International Bank.
The group also operates affiliated banks, brokerages and other companies in Mexico and elsewhere in Latin America.
Writing by Helen Popper; Editing by Lisa Von Ahn