Senators probe inaction against Stanford

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Source: Houston Chronicle

WASHINGTON — Angry senators grilled top officials of the Securities and Exchange Commission on Wednesday, citing the agency's delays in taking action against accused swindler R. Allen Stanford despite repeated red flags about his financial firm's operations.

Lawmakers sharply questioned Rose Romero, the director of the SEC's Fort Worth regional office, and Robert Khuzami, the agency's national enforcement director, about a report from the agency's independent inspector general.

It found that the Fort Worth compliance office decided at least four times not to act on findings by SEC staffers that Stanford appeared to be operating a Ponzi scheme.

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The inspector general's report concluded that Fort Worth SEC officials harbored suspicions that Stanford was acting illegally as early as 1997, two years after his company's broker-dealer arm, Stanford Group Co., registered with the SEC.

Read more: http://www.chron.com/disp/story.mpl/business/7213620.html