If it sounds too good to be true, it's probably a huge pile of horse manure. That's the lesson we should take from this business about Sir Allen Stanford. It seems that the man who was supposed to save British cricket has disappeared after his lawyer blew the whistle on $8bn that he may have defrauded from investors. And as US marshals stormed his Houston office this week, they'll soon uncover a trail of investors from the Caribbean to Britain left out of pocket.
But they've only themselves to blame. It sounds like Stanford was up to the same dirty tricks as arch fraudster Bernie Madoff. Bloomberg reports how he would fly investors down to Antigua in one of his private jets, show them his mansion and explain over cocktails how you could earn more than 10% each year on your money (no questions asked). All you had to do was entrust your money to Stanford International Bank, the company set up by his grandfather during the Great Depression. It was a deadly charm offensive. The institution claims 30,000 clients and $7.2bn in assets under management, according to the Securities and Exchange Commission.
The trouble is that Stanford Financial was set up in 1985 on the regulation-light Caribbean island of Montserrat. And Stanford only began using the title 'Sir' in 2006, after being knighted by the leaders of Antigua & Barbuda, his adoptive country. None of that mattered to investors anyway, as long as the money kept rolling in. But when they received news that they'd banked a 15.71% return on their certificates in 1995 and exactly the same again in 1996, they should have twigged what was going on.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The same goes for the English Cricket Board. When the Texan landed his helicopter on the Nursery Ground at Lord's last year to announce his $1m-a-man cricket showpiece, they must have wondered what kind of cowboy they were dealing with. But it was all smiles once he unveiled a huge perspex box with $20m in (fake) cash. And when he was criticised for being overly friendly with the wife of an English cricketer during the game itself, the whole tacky episode was (nervously) laughed off by the Board. It's amazing how quickly the sight of a big pile of cash can make you forget your scruples.
Russia's new number one
Spare a thought for Roman Abramovich, who got knocked off the top of the Russian rich list this week. It turns out the Russian tycoon has lost out to precious-metals magnate Mikhail Prokhorov, having lost nearly $24bn during the financial meltdown. He's now in eighth place among Russia's elite.
There was some consolation for Abramovich; Finans magazine rated him the "most interesting Russian oligarch". But Prokhorov came a close second. "His interesting CV includes pimping charges brought against him in January 2007 when he was arrested in the French ski resort of Courchevel for allegedly arranging prostitutes for his guests," notes The First Post.
Tabloid money... I want bankers to feel our pain
The false regret and mock tears of the bankers last week would make a crocodile blush, says Jon Gaunt in The Sun. They still have their knighthoods, pensions and bonuses, so they are hardly suffering. "I didn't want them in the House of Commons, I want them investigated in a court of law. I want these dishonourable men stripped of their honours. I want them to feel our pain." The government should be punishing these men, not sitting on their hands and allowing them to get away with it. And we've yet to get an apology from the "No.1 banker himself, Gordon Brown", who is "clinging, limpet-like, to power while the country goes to the dogs". Come voting time, he'll have "as much chance of being elected as I have of being voted slimmer of the year."
You can always rely on bishops to take the mick, says David Robson in the Daily Express. "Comfortably housed and furnished with a gold-plated key to the after-life, they boldly go where other jokers can't." Take Richard Chartres, bishop of London, who has said that losing a job could be a blessing as it would enable us to "reboot our sense of what a truly flourishing human life consists of". This coming from a man who earns £57,040 a year and lives in a rent-free house. "I think its possible that those of us with lower horizons and bigger mortgages are less enthusiastic about getting the boot."
David Cameron needs to "spare us the Citizen Dave guff," says Kevin Maguire in the Daily Mirror. Cameron claims he knows the difficulties people are going through as he pays for his own petrol. But the Bullingdon Boy is on £135,000 a year, his heiress missus is director of a stationer "so posh they must use Basildon Bond as scrap paper", and he lives in a £2m Notting Hill home with a £750,000 cottage for the weekends, courtesy of taxpayers. "The more you pretend, the clearer it is you enjoy the 'rarefied experience' you so vehemently deny."
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
