Stanford CIO Gets Five Years

Jan 23 2013 | 10:02am ET

The CFO of R. Allen Stanford's empire of fraud was sentenced to five years in prison yesterday for his role in the $7 billion Ponzi scheme.

James Davis was a key witness in Stanford's trial, which resulted in the Texas financier's conviction and 110-year prison sentence. Davis described his former college roommate's "business" to the jury, noting one incident in which he was sent to London to fax a prospective client from a non-existent insurance company office, reassuring him about the safety of the investment he was contemplating.

Davis had faced up to 30 years in prison, and prosecutors had sought a decade, noting that he began cooperating only after Stanford's empire had collapsed and he had no other viable options.

"Mr. Davis for 20 years lied and deceived thousands of investors, employees and the public, and helped Allen Stanford commit one of the largest frauds in American history."

"I am ashamed and I'm embarrassed," Davis said in Houston federal court. "I've perverted what was right and I hurt thousands of investors. I betrayed their trust and also associates and neighbors and friends and my family."

Two other former Stanford executives will be sentenced next month.

Davis pleaded guilty to fraud and conspiracy three years ago. He was ordered to report to prison within 60 days, during which time he's to meet with those who have filed lawsuits stemming from the fraud.

Some of those lawsuits were filed against Stanford's former lawyers. Whether they'll be allowed will go before the U.S. Supreme Court.

The high court on Friday accepted a petition from lawyer Thomas Sjoblom, two firms he worked for, Chadbourne & Parke and Proskauer Rose, and insurance brokerage Willis Group Holdings. The state-law claims accused Sjoblom of obstructing a Securities and Exchange Commission investigation into Stanford, but Sjoblom, Willis and the law firms argue that state-law claims are barred in the matter by a federal law.

The Supreme Court could hear the case in April.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.