Great frauds in history: Stanford’s great bank-bond heist

Matthew Partridge looks the fraud perpetrated by Robert Allen Stanford, which netted him $7bn from certificates of deposit.

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(Image credit: 2009 Getty Images)

Robert Allen Stanford was born in Texas in 1950 and made a living running a gym before that failed and he turned to speculating in real estate in Houston in the 1980s. He made his fortune, then moved to the Caribbean island of Montserrat, setting up the Guardian International Bank, then moving it to the nearby island of Antigua and renaming it Stanford International Bank (SIB) to avoid a regulatory crackdown. He also set up a wealth-management firm, which encouraged clients to invest their money in certificates of deposits (CDs, redeemable bonds used by banks) issued by Stanford International Bank. These offered a higher interest rate than CDs offered by US banks, but were supposedly backed by insured assets.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri