Antigua: The United States Justice Department had accused Spencer C. Barasch, a former enforcement official for the United States’ Securities and Exchange Commission (SEC), of blocking or closing at least three investigations into the activities of disgraced Texas financier Allen Stanford. Barasch has agreed to a civil settlement that would result in payment of a US$50,000 fine, according to a report in the Antigua Observer.
Barasch, who from 1998 to 2005 served as the enforcement director for the SEC’s Fort Worth regional office, is accused of violating conflict-of-interest rules by later representing Stanford before the commission. The SEC is the regulatory arm of the US’ financial services.
John M. Bales, the United States attorney for the Eastern District of Texas, said that Barasch has received the maximum fine for a violation of US federal conflict-of-interest rules and it is much less than the punishment he would have faced had the Justice Department pursued a criminal case.
The Antigua Observer report stated that US government officials said at a Congressional hearing last May that Barasch was the subject of a criminal investigation into his work for Stanford, which was also the subject of much of a 150-page report by the commission’s inspector general issued in March 2010. The report found that Barasch frequently discouraged or halted further investigation into Stanford Financial by SEC staff members, and that he subsequently represented the firm in talks with SEC officials about other or continuing investigations.
Stanford is accused by US authorities of engaging in a massive US $7 billion Ponzi scheme involving his Antigua-based Stanford International Bank (SIB). He is scheduled to go on trial on January 23 in Houston, Texas.
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