Exclusive: Romney Family Partnered With Brokers Who Allegedly Perpetrated $8 Billion Ponzi Scheme

[kpete]

Exclusive: Romney Family Investment Group Partnered With Brokers Who Allegedly Helped Perpetrate $8 Billion Ponzi Scheme
By Lee Fang posted from ThinkProgress Economy on Nov 1, 2011 at 9:31 am

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Mitt Romney, his son Tagg, and Romney’s chief fundraiser, Spencer Zwick, have extensive financial and political ties to three men who allegedly participated in an $8.5 billion Ponzi scheme. A few months after the Ponzi scheme collapsed, a firm financed by Mitt Romney and run by his son and chief fundraiser partnered with the three men and created a new “wealth management business” as a subsidiary.

In an exclusive interview with ThinkProgress, Tagg Romney confirmed their business relationship, but falsely claimed that the men were cleared of any wrongdoing associated with the Ponzi scheme. Tagg Romney told ThinkProgress that his three partners collected about $15,000 from their involvement in the Ponzi scheme. Court documents obtained by ThinkProgress show that the legal proceedings are ongoing and the men made over $1.6 million selling fraudulent CDs to investors.
The Ponzi Scheme

In 2009, prosecutors announced charges against the Stanford Financial Group, which managed a portfolio of $8.5 billion, for running a “massive, ongoing fraud” against its investors. The Ponzi scheme bust was one of the largest in recent history, second only to Bernie Madoff, who perpetrated a fraud estimated to be around $17 billion. The Stanford Ponzi scheme wiped out the savings of thousands, including many American retirees across the country. In Texas, 1290 people lost their retirement savings because of the Stanford Ponzi scheme; in Louisiana, several hundred reportedly suffered the same fate.

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Mitt Romney himself made a $10 million initial seed investment in Solamere Capital and his personal financial disclosure forms reveal that he has received between $100,000 and $1 million in returns from his stake in Solamere. Romney has come under fire for refusing to release his tax returns, which would likely reveal additional details about his financial relationship with Solamere Capital.

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MORE DETAILS:
http://thinkprogress.org/economy/2011/11/01/316040/romney-solamere-ponzi/

[Viva_La_Revolution]

1. detailed article.. it even has flow charts!

:rofl:

thanks kpete!

[kpete]

2. Viva_La_Revolution

wow, what a name that is!

thanks for pointing out the flow chart

peace, kpete

[Hissyspit]

18. Hey, Viva...

Long time no see. :)

[Viva_La_Revolution]

21. I've just been quiet lately, that's all

:hi:

I've been seeing you on the twitter :)

[Hissyspit]

22. Are you on Twitter?

Send me your handle if I'm not following you. If I am, remind me who you are!

[Viva_La_Revolution]

23. ...

@vivapdx

<--- same avatar :)

[starroute]

3. The Stanford Financial Group was Allen Stanford's racket

I don't know why the Think Progress piece doesn't say so explicitly. Allen Stanford's name comes up only in passing, with the TP reporter asking Tagg Romney, “Did you know that some of those guys were in with, there were allegations that some of those guys were involved with the Allen Stanford Ponzi scheme?”

But the notoriety of that case would seem to make the Romney family's far dirtier than if was just a random, little-known ponzi scheme.

http://en.wikipedia.org/wiki/Stanford_Financial_Group

The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Headquartered in the Galleria Tower II in Uptown Houston, Texas, U.S., it had 50 offices in several countries, mainly in the Americas, and said it managed US$8.5 billion of assets for more than 30,000 clients in 136 countries on six continents. On February 17, 2009, U.S. Federal agents put the company under management of a receiver, because of charges of fraud. On February 27, 2009, the U.S. Securities and Exchange Commission amended its complaint to describe the alleged fraud as a "massive Ponzi scheme".

[starroute]

6. And it's not like this has been completely unknown

http://www.istockanalyst.com/article/viewiStockNews/articleid/3336475

July 07, 2009

Jul. 7--The son of former presidential candidate Mitt Romney is investing in a new financial services firm that will be based in Charlotte.

Tagg Romney, who last year founded the Massachusetts private-equity firm Solamere Capital, is backing a newly formed wealth management firm called Solamere Advisors. The firm will open with 11 advisors; almost all were most recently employed by the Stanford Financial Group, a name that was tainted in February when its founder was accused of running a multi-billion dollar Ponzi scheme. . . .

The Stanford Financial Group had about three-dozen employees at its Charlotte office in South Park before accusations broke against Texas financier R. Allen Stanford. By March, a court-appointed receiver had shut down the Charlotte office as well as locations in Asheville and Greensboro. The Charlotte office had been open since 2006.

The Securities and Exchange Commission accuses Stanford and some of his financial advisors of selling $8 billion of so-called certificates of deposit. The purported CDs offered high rates of return for years, but regulators say Stanford lied when he told investors that their money was largely invested in liquid financial instruments, monitored by a team of experienced analysts, and subject to yearly audits by regulators in Antigua.


http://www.onwallstreet.com/ows_issues/2008_3/whos-news545891-1.html

March 1, 2008

Stanford Group Company has recruited Tim Bambauer, Deems May and Bryan Cannon to its private client group office in Charlotte, NC. All three join from Morgan Keegan, also in Charlotte, where they oversaw $130 million worth of assets. Bambauer has 17 years experience and was one of Morgan Keegan's top 20 producers. May is a former professional football player for the San Diego Chargers and Seattle Seahawks.

[starroute]

7. Bambauer and May's old firm, Morgan Keegan, wasn't that clean either

Note that the fraud mentioned in these articles occurred in 2007, while Bambauer and May were still there.

http://www.charlotteobserver.com/2011/06/23/2399226/briefly.html

Jun. 23, 2011

Investment firm Morgan Keegan & Co. is paying $200 million to settle civil fraud charges that it overstated the value of mortgage investments just as the housing market was collapsing in 2007 and lured buyers of its funds with false sales materials.

Morgan Keegan's parent company, Regions Financial Corp., said it has hired investment bank Goldman Sachs & Co. to explore "potential strategic alternatives," which could include a sale of the firm or divisions of it. Regulators said the actions of Morgan Keegan caused investors to lose an estimated $1.5 billion. The company is based in Memphis, Tenn., and also has a Charlotte presence.


http://www.charlotteobserver.com/2011/11/01/2740263/200m-coming-to-investors.html

Nov. 01, 2011

A.B. Data Ltd. will distribute money from settlements with Morgan Keegan & Co. and Morgan Asset Management to investors in Mississippi, Alabama, Kentucky, South Carolina and Tennessee.

Mississippi Secretary of State Delbert Hosemann said Monday the five states and the federal Securities and Exchange Commission hired the Milwaukee, Wis.-based company to divide up the $200 million to Morgan Keegan investors.

The settlements resulted from an investigation of seven bond funds sold by Morgan Keegan to more than 30,000 investors. The firms were charged with sales violations and overvaluing the funds that lost approximately $1.5 billion in value between March 31, 2007, and March 31, 2008.

The Securities and Exchange Commission and the five states required Morgan Keegan and Morgan Asset Management to pay a total of $200 million to establish an SEC Fair Fund and a States' Fund, both to be paid to investors. A.B. Data has previously administered several settlement funds in securities litigation cases and for the SEC.

[Scuba]

4. Another great find by kpete. Thanks!

[Hotler]

5. k&r n/t

[nc4bo]

8. Oopsie..

Oh my, seems Mittens has been a very busy boy.

Thanks and K&R for awareness.

[aint_no_life_nowhere]

9. Something for Rick Perry could mention at the next debate:

"You were involved with individuals who were selling fraudulent CDs for enormous profits". I'd like to think this would raise serious questions about Romney, even within his own party. But with these nouveau-psycho teabaggers you never know. They might give Mitt a stading ovation for being successful at making money.

[surrealAmerican]

12. Perry won't do it though ...

... because he won't be able to understand this scheme. Basically if you can't explain it in a way a seven-year-old could understand, it's beyond him.

[seafan]

10. So, Mitt Romney has extensive ties with 3 former Allen Stanford Ponzi players? Say it ain't so.

A big hat tip to kpete for the heads up from Think Progress.



Mitt and his son Tagg are deeply involved with three of Ponzi schemer Allen Stanford's most prominent former brokers, in a venture known as Solamere Advisors. They are Tim Bambauer, Deems May, and Brandon Phillips. Oh, but Tagg insists these three men earned 'very little' while they worked for Stanford....

.....

“They probably made, their pay there was like $15,000 total. Those guys got totally screwed by the whole thing. It almost ended their whole careers because they moved all their clients over (to the Stanford Financial Group), and then the place was shut down two months after they moved their clients over. They hadn’t made any money yet. They had bonuses and everything promised to them, but they didn’t make any of their money. So they made no money.”

.....

(via Think Progress)

Here is a lovely diagram of how the Romneys are connected to these three prominent Stanford Ponzi scheme brokers, via Think Progress:





(The only name missing on that chart is perhaps 'Jeb Bush'...)

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The revelation about Romney’s ties to the Stanford ponzi scheme unmask the risks associated with removing new investor protections. The Dodd-Frank Wall Street Reform law, a reform Romney says he will repeal if he wins the presidency, attempts to address future Ponzi schemes by enacting new protections for whistleblowers to alert authorities when they find evidence of fraud. The law also creates a new Investor Advocate and Investor Advisory Committee within the Securities and Exchange Commission to detect and investigate future Ponzi schemes.

Mike Hudson, a reporter with iWatch News and author of a new book about how predatory Wall Street practices created the financial crisis, told ThinkProgress that Dodd-Frank “could be a game changer that helps the SEC identify and shut down Ponzis and Ponzi-like schemes.” But on the campaign trail, Romney, a fierce critic of efforts to reign in Wall Street practices, has called new investor protections like Dodd-Frank “extraordinarily burdensome.”

When ThinkProgress spoke to Tagg in Las Vegas, the last question about the Stanford Ponzi scheme was this: “How do you prevent a Ponzi scheme like that?” “Hey guys, we’re done,” Tagg (Romney) said before taking off.

Like father, like son.




More on Stanford's Ponzi ripoff scheme here, here, here, here, here, here and here.



Again, we ask, when will we see justice?


That Mitt Romney, enthusiastically praised by Jeb Bush, thinks he should be president is an insult.



Corporations are People, my friend.---Mitt Romney, August 11, 2011

[starroute]

13. There are some big problems with what Tagg claims

See the items I posted above.

First off, if these guys joined Stanford in March 2008 and the scandal only broke in February 2009, that's nearly a year -- not "two months." So I'd like to know more about that discrepancy.

Second, if Solamere recruited almost all of its 11 advisers from former Stanford people, who were the others and how long had they been with Stanford?

Third, there's Bambauer and May's former firm, Morgan Keegan, which was running its own fraud involving bond funds "that lost approximately $1.5 billion in value between March 31, 2007, and March 31, 2008." Could that have anything to do with Bambauer and May's departure in March 2008?

And fourth, I'm just plain curious about Deems May. Former NFL tight ends are not generally known for their financial acumen. So what was his role as an "adviser"? Window-dressing for the marks? Inquiring minds want to know.

[redqueen]

11. K&R

[momrois]

14. 10, count 'em, TEN Stanford folks

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090708/REG/907089980

There a registration thing that asks a bunch of stupid questions, buy I just answered generally without giving any details and I was in.

[starroute]

15. Names and relationships are more easily accessed at this link

http://familywealthreport.com/article_print_preview.php?id=24904

A group of New England-based private-equity investors -- including the eldest son of 2008 U.S. presidential candidate Mitt Romney -- is backing a new Charlotte, N.C.-based investment advisory started by group of former Stanford Financial Group advisors. The founders of Solamere Capital see Solamere Advisors as a good bet because of its principals' experience and strong ties to prospects in the Carolinas, its high-touch and holistic approach to family-wealth management, and an overall trend favoring independent boutiques over full-service giants. . . .

Romney co-founded Solamere Capital last year with Eric Scheuermann and Spencer Zwick to facilitate private-equity deals that come to its attention through its founders' ties to successful business builders and top executives. . . .

However harrowing the Stanford Financial experience may have been, the association was brevity itself for five of Solamere Advisors' 11 principals. That part of the team joined from Charlotte-based Wachovia's Wealth Management Group late in 2008. Another five of them joined Stanford Financial from Memphis, Tenn.-based Morgan Keegan's private-client group in 2007. One, Kristin Lewis, came directly from Wachovia (now part of San Francisco-based Wells Fargo) without a stopover at Stanford Financial.

Morgan Keegan veteran Timothy Bambauer and Wilson, a former Wachovia advisor, are Solamere Advisors' co-managing partners. Joining them in the firm's investment-service division are Brandon Phillips (out of Morgan Keegan) and Peter Jespersen (Wachovia). Leila Evans (Wachovia) and former Morgan Keegan employees Deems May, Bryan Cannon and Amanda Hogan make up the firm's client-service squad. In planning and fiduciary services are ex-Wachovians Stephen Barber, Laura Richards and Lewis.

[malaise]

16. Delish!!

:popcorn:

[Dont call me Shirley]

17. Mitt, Tagg, Boff, Kell, Jumm... such cute names

[russspeakeasy]

19. Where is Muffy ?

[Enthusiast]

20. Republican scum. What else is new? nt

[Kingofalldems]

24. Here comes Bush

[defendandprotect]

25. And Romney is worth $250 MILLION so he obviously needs MORE, MORE, MORE !!!

[TomCADem]

26. k&r