South Florida Arbitration & Litigation Lawyer Blog
In The Matter Of Daniel Bogar, Bernerd E. Young, and Jason T. Green
September, 2012:
The Securities and Exchange Commission recently announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the Securities Exchange Act of 1934, Sections 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940 against three former executives of Stanford Group Company (SGC), a dually registered U.S. broker-dealer and investment adviser owned by Robert Allen Stanford (Allen Stanford). The Order alleges that these former SGC executives defrauded investors of certificates of deposit (CDs) issued by an affiliated Antiguan bank, Stanford International Bank (SIB). The Division of Enforcement alleges that SGC marketed and sold SIB CDs to U.S. investors as safe and secure based on the purported liquid and diversified composition of SIB’s investment portfolio. However, SIB repeatedly refused to reveal – even to its own affiliate, SGC – the contents of its portfolio. SGC also marketed and sold SIB CDs as “insured” even though the only backing they possessed was the full faith and credit of Allen Stanford. Further, SGC failed to disclose the significant conflicts of interest created by SGC’s overall reliance on cash infusions by SIB and by SGC’s CD-centric compensation program.
The former Stanford Group Company executives charged today (Respondents) are:
- Daniel Bogar, formerly SGC’s President;
- Bernerd E. Young, formerly SGC’s Chief Compliance Officer and Managing Director of Compliance; and
- Jason T. Green, formerly President of SGC’s Private Client Group
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondents with an opportunity to respond to these allegations, and to determine what sanctions, if any, are necessary and appropriate in the public interest. The Order directs the Administrative Law Judge to issue an initial decision no later than 300 days from the date of service of the Order on the Respondents. (Rel. 33-9356; File No. 3-15003).
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