BR investors sue Stanford advisers

A group of 10 Baton Rouge area investors yesterday filed suit in 19th Judicial District Court against six Stanford Group Co. and Stanford Capital Management advisers and four insurance companies. The suit alleges negligence on the part of the advisers, saying they recommended the purchase and/or renewal of CDs from Stanford International Bank and received above market commissions on the sale of those CDs.

Hoping to halt what it called “a fraud of shocking magnitude that has spread its tentacles throughout the world,” the SEC charged billionaire R. Allen Stanford and other executives at his massive financial services company with operating an $8 billion fraudulent investment scheme. In a complaint filed in mid-February in U.S. District Court in Dallas, the SEC alleged Antigua-based Stanford International Bank fabricated investment returns in order to market and sell high-yielding CDs. The SEC immediately acted to freeze all of Stanford’s assets, with the FBI also breathing down the company’s back. The FBI is now asking investors to come forward.

In 2007 Stanford officials claimed $2 billion had been collected from investors through the group's Baton Rouge and Lafayette offices, a figure some in local financial circles find dubious. Still, it is clear a number of Baton Rouge and Lafayette investors stand to lose millions in this latest financial scandal.

In their suit, the Baton Rouge investors allege that because of the marketing plan and commission structure, the advisers failed to inquire about material facts and risks of the Stanford International Bank's CDs — the kinds of risks any adviser should have known and understood — and failed to inform the plaintiffs of the risks. “In truth and in fact, the ‘bank’ was a speculative highly leveraged hedge fund and the so-called ‘certificates of deposit’ were nothing more than a high-risk ultra speculative mezzanine type of junk bond,” the lawsuit states.

Advisers allegedly promised an 8 percent return on the so-called CDs, much higher than any traditional CDs were yielding at the time.

Stanford’s local office was headed by Hank Mills (one of the defendants in the Baton Rouge case who also is the brother of state Rep. Fred Mills) and Tiffany Angelle, the one-time marketing director of Fred Mills’ bank, Farmers-Merchants Bank. Angelle's bio on the Stanford Web site indicates that she left the bank to join Stanford Group Co. in 2004 with more than five years of experience and a bachelor's degree in finance from UL Lafayette. A press release in early 2008 noted her promotion to vice president/financial adviser in the Lafayette market.

Local business people tell the INDsider that Stanford targeted very wealthy investors in the Acadiana area. So far, none of those investors has come forward with any legal action against the company, making the Baton Rouge lawsuit the first in the state.

(Editor's Note: If you or anyone you know invested with the Stanford office in Lafayette, located in River Ranch, contact Leslie Turk at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .)

Comments (6)

Subscribe to this comment's feed