Ask Andy: Concerns about Stanford Financial CD's - WMC Action News 5 - Memphis, Tennessee

Reported By Andy Wise

Ask Andy: Concerns about Stanford Financial CD's

We know the Securities Investor Protection Corporation (www.sipc.org) is protecting Stanford Financial investors' traditional investments, like mutual funds, stocks, municipal bonds.

But the Action News 5 Investigators have learned the SIPC may not be able to protect investors who have certificates of deposit (CD's) with Stanford.

"If people invested in a CD, their investment is in severe risk because it is not insured by the FDIC (Federal Deposit Insurance Corporation, www.fdic.gov)," says Andy Wilson, a financial fraud investigator with Wilson & Turner, Inc. investigative consultants (http://www.wilson-turner.com/).

The FDIC does not insure investments that are held in foreign banks, like Stanford Financial's Antigua bank.

"These CD's that Stanford sold are held at a foreign bank, not at Pershing LLC, which is the clearing/holding firm that Stanford uses," says Fred Hiatt, Vice President of Relationship Development for the Memphis investment firm Waddell & Associates (www.waddellandassociates.com).  "So anything not held at Pershing doesn't have any insurance attached to the account. The only clients that should be concerned should be the CD holders of the Antigua bank."

The U.S. Securities & Exchange Commission (SEC) has frozen all of Stanford Financial's accounts. A federal judge has them held in receivership, not only to protect the accounts but also to allow investigators to figure out which ones may involve fraud.

So stay in touch with your financial advisor, even if its a Stanford financial advisor -- it's the bosses who are in big trouble, not the financial advisors...and let's see how the federal investigation plays out.

Click here to link to our first Ask Andy story on Stanford Financial:

http://www.wmctv.com/global/story.asp?s=9874258

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