American Bankruptcy Institute Journal
April 1, 2024
By: J. Leland Murphree and Christian A. Pereyda
“In 2009, the U.S. Securities and Exchange Commission (SEC) uncovered the Stanford International Bank (SIB) Ponzi scheme. For almost 20 years, SIB issued fraudulent certificates of deposit with fixed interest rates purportedly based on returns from “a well-diversified portfolio of marketable securities.” However, there was no such portfolio and — as with all Ponzi schemes — existing investors’ “returns” were actually new investors’ fraudulently obtained funds. As one court stated, “The massive [SIB] Ponzi scheme defrauded more than 18,000 investors who collectively lost over $5 billion.””
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