Thursday, February 18, 2010

ECCB sued by Sanford investors

BASSETERRE, St. Kitts: LEGAL action has been brought against the Eastern Caribbean Central Bank (ECCB), five regional banks and the government of Antigua and Barbuda by a group of Stanford investors who claim they lost big after the "unlawful seizure" of the Bank of Antigua.

The Stanford Victims Coalition filed a class-action lawsuit in the US District Court in Dallas, Texas against the Caribbean financial institutions, complaining that the ECCB's intervention in the Bank of Antigua was unlawful because the bank was of significant value to the victims.

Regional banks include the Antigua Commercial Bank, the St Kitts-Nevis-Anguilla National Bank, Eastern Caribbean Financial Holdings (Bank of St Lucia), the National Commercial Bank (St Vincent and the Grenadines) and the National Bank of Dominica: institutions that joined together to run the affairs of the Bank of Antigua after its Chairman Allen Stanford had been charged with fraud by the US Securities and Exchange Commission (SEC) on February 17, 2009.

The lawsuit was filed by New York firm Morgenstern & Blue, LLC and in an SVC statement made on February 16, Attorney Peter Morgenstern noted that the victims are seeking compensation for the value of the Bank of Antigua when it was seized a year ago.

In sharp criticism of the ECCB's intervention Morgenstern said,"Instead of acting as a legitimate central bank, the ECCB became a partner in crime with the Government of Antigua and Barbuda when it seized the Bank of Antigua, a viable and valuable financial institution.

"The Bank of Antigua was, and remains, enormously valuable. All of that value rightfully belongs to Mr Stanford's victims," the attorney said, making reference to loan receivables from the government of Antigua and Barbuda worth tens of millions of dollars or more.

There has been no official statement made by the central bank or the SKNA National Bank as yet, but Antigua and Barbuda’s Attorney General Justin Simon told a local radio station that neither the victims nor the Stanford investors seemed to realise that the ECCB had saved the Bank of Antigua from collapse.

"To accuse the ECCB of thievery and of stealing the millions at which the Bank of Antigua is valued is more than preposterous and ludicrous. The ECCB actually pumped EC$89 million (US$32.9 million) to save the Bank of Antigua.

"That $89 million is money which is guaranteed in terms of repayment to the ECCB by the various other indigenous banks who themselves form part of the ECCB banking sector, so there has been no stealing, there has been no thievery, there has been no expropriation," the Antiguan AG informed.

Simon said he is "very upset" with the court action, as he opined that it came from "the uninformed and is itself unbelievable". According to him, the OECS territories would have been exposed to severe risks if the ECCB had not intervened.

The SVC did not stop at challenging the institutions, but also have been involved in leading a campaign for a boycott of Antigua and Barbuda. Dubbed "Anti-Crime, Anti-Antigua", the campaign calls on international travel professionals and investors to boycott hotels and resorts in the island, cruises to Antigua, investments in Antiguan financial institutions or in companies or ventures based in Antigua.

"I really resent the allegations which have been made in that claim and also resent and regret the call for a boycott of Antigua and Barbuda," Simon added.

Attempts made to contact a member of the Corporate relations Department at the central bank proved unsuccessful.

From St. Kitts News Service