Stanford Financial sacks 1,000 employees in US

07 March 2009

Troubled Stanford Financial Group has cut about 1,000 jobs in the US, nearly 85 per cent of the company's US employees, effective Friday. The employees, however, were not offered any severance pay or bonuses.

Dallas lawyer Ralph Janvey, the court-appointed receiver, issued a statement that keeping them on the job wasn't in the interest of preserving whatever money was left because there are ''insufficient resources'' to keep paying the workers.

In fact, none of the Stanford employees have been paid since the court receiver took over the company on 17 February. Many have their Stanford accounts frozen by the court as well.

Most of the operations of Texas billionaire Allen Stanford's companies, which is under probe by the US Securities and Exchange Commission, will also be discontinued, he said in a statement.
 
Stanford, his two top aides and three of his companies have been charged with embezzlement in a long-running $8 billion `Ponzi' scheme involving high-yield certificates of deposit.

The group will retain a few employees in order to help with the winding down of its operations, Janvey said.

On Monday, while deposing in a federal court in Dallas, Janvey had said that the company was in a liquidity crisis and had millions in unpaid bills. The court has released the frozen Stanford brokerage accounts held by Pershing LLC, which had a balance of $250,000 or less.