At issue is a Swiss bank account held by one of Mr. Stanford's companies at SG Private Banking (Suisse) SA, a Société Générale subsidiary, that was allegedly funded with investors' money and used to make payments into Mr. Stanford's personal accounts and for bribes to his Antiguan auditor. Prosecutors in the criminal probe are examining whether Société Générale failed to follow due diligence procedures or to ask questions about irregular banking activity, the people familiar with the matter said.I've been working on a mini-essay for an upcoming conference on the intersection of white collar crime and bankruptcy law (see here), and this whole issue of why smart people can ignore red flags fascinates me. I'll be following this story. More on the conference as we get closer to the event.
Saturday, September 17, 2011
"Too good to be true" never is.
In yesterday's Wall Street Journal, Michael Rothfeld reported (here) that Société Générale may have ignored a red flag on Allen Stanford's account. He writes: