Is Allen Stanford The 21st Century’s Jay Gatsby?

February 16, 2009 11:25 a.m.

It looks like Allen Stanford, the billionaire Texan banker whose investment firm is being probed by the Feds, has a positively Gatsbyesque yearning to be accepted into high society.

As we knew, Stanford calls himself “Sir” Allen Stanford, on account of a knighthood he was awarded by the former prime minister of Antigua, where his business is based. But it looks like maybe that wasn’t quite good enough for Stanford, since until recently he was claiming, falsely, that the knighthood was presented by the British Royal family.

Check out this report (via Nexis), from last November in the Mail on Sunday of London:

Texan-born billionaire Sir Allen Stanford’s corporate website claims that, after he became a citizen of the Commonwealth territory of Antigua, it appointed him a ‘Knight Commander of the Most Distinguished Order of the Nation’.

‘He was presented [with] this honour by His Royal Highness Prince Edward, Earl of Wessex,’ states the website.

However, The Mail on Sunday has learned that the Prince had nothing to do with the honour and that it was not approved by the Queen.

A Buckingham Palace spokesman said it was a coincidence that the knighthood ceremony, conducted by an Antiguan political appointee, took place during a celebration of the island’s independence, at which Prince Edward was a guest.

‘It is incorrect to say that the Earl of Wessex knighted this person while in Antigua,’ said the spokesman.

Stanford’s personal web site now says only that the Earl of Wessex attended the ceremony at which the “royal knighthood” was bestowed. (Though the “royal” part still seem dubious, since Buckingham Palace has disavowed any role in the proceeding.)

The whole tale is reminiscent of Stanford’s claim to be descended from the founder of Stanford University. The school has denied the link.

Indeed, even the awarding of Stanford’s title by the Antiguan government appears to have been pretty irregular. The paper explains:

His knighthood was bestowed in 2006 under an Antiguan law that allows its politicians to draw up an annual honours list.

But the decision to honour Stanford has caused an outcry on the island, where his ownership of a £1billion financial and property empire has made him a divisive figure. Critics deride the award as a ‘mockery’ and have gone to court to challenge the legislation.

Antigua’s National Honours Act authorises the granting of titles to distinguished citizens, who are screened by a bipartisan committee.

But Stanford was knighted under a 2000 amendment to the act, which permits the island’s most powerful politicians to allow their candidates to bypass the vetting procedure.

Phillip Abbott, a businessman who is descended from the island’s first settlers, has contested in the Antiguan High Court that the amendment is invalid. ‘The spectacle of Allen Stanford being knighted got up my nose,’ he said. ‘This amendment permits politicians to nominate anyone for a title without going through the vetting required by law.’

As we said, Gatsbyesque.

New details have also emerged about Stanford’s business, and what might have tipped off regulators that something fishy was going on.

Reuters reports:

According to US regulatory filings, Stanford owns more than 10 percent stakes in three companies trading below $2 per share on the Bulletin Board or Pink Sheets: eLandia International Inc, a Coral Gables, Florida technology company.

Forefront Holdings Inc, a Brentwood, Tennessee provider of golf supplies; and Health Systems Solutions Inc, a New York technology and services company. “These were not exactly blue chip companies,” said Bob Parrish, an accountant in Longboat Key, Florida, whose clients pulled roughly $500,000 out of Stanford last year.

The high rates for certificates of deposit, long considered safe short-term investments, seem to have caught the attention of U.S. regulators who began probing the company in mid-2008.

The wire service adds that the Texas Attorney General’s office, and the Florida Office of Financial Regulations are also probing the company.

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