Antigua names new financial regulator after Stanford scandal

September 1, 2009

MIAMI, Sept 1 (Reuters) – Antigua and Barbuda has appointed an experienced banker to head the tiny Caribbean nation’s financial regulatory body, replacing Leroy King, who faces U.S. charges of abetting accused swindler Allen Stanford.

A government statement released late on Monday said John Benjamin, a banker with more than 40 years of experience, was named administrator and chief executive officer of Antigua and Barbuda’s Financial Services Regulatory Commission.

He replaces King, who is under house arrest and awaiting U.S. extradition proceedings for his role in the alleged $7 billion fraud that U.S. prosecutors say was operated by Texas billionaire Stanford and his associates using certificates of deposit issued by Stanford International Bank in Antigua.

U.S. prosecutors say King received regular bribes from Stanford over several years to keep U.S. Securities and Exchange Commission investigators from probing the operations of the Antigua-based bank.

Stanford, 59, has denied any wrongdoing and was taken to the hospital with a racing pulse last week hours before he was due to appear in a federal court in Houston for a hearing. His lawyer says he will undergo heart tests.

In a plea agreement filed in the Houston court last week, Stanford’s former top aide, James M. Davis, alleged that King performed a “blood oath” brotherhood ceremony with Stanford in 2003, in which in exchange for cash bribes he was to ensure that Antiguan regulators did not “kill the business” of the Stanford bank on the island.

Stanford, a flamboyant sports entrepreneur who backed Caribbean cricket tournaments, was granted a knighthood by Antigua and Barbuda and was once its biggest investor.

Former Stanford clients from the United States, Mexico, Colombia and Peru are suing the tiny Caribbean state for up to $24 billion in damages, alleging it was a “partner in crime” with Stanford.

Antigua and Barbuda’s government denies this. It says the Stanford scandal badly hurt the economy of the small state of around 85,000 people, causing losses and layoffs and damaging the nation’s image as an offshore finance destination.

The Antiguan government statement said Benjamin, the new Financial Services Regulatory Commission chief, had previously worked with Barclays Bank PlcĀ  and the Antigua Commercial Bank and more recently had been managing director at TCI Bank Ltd of the Turks and Caicos Islands.

His appointment will run for a period of six months.

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