Employees of investment firm Stanford laid off
About 1,000 people working around the nation for the troubled Stanford Financial Group founded by Texas billionaire R. Allen Stanford were laid off Friday by order of the court-appointed receiver in the investment firm's case.
"After a review of the circumstances, the receiver concluded that continuing employment for these employees is not in the interest of conserving and preserving the value of the estate because there are insufficient resources to continue to compensate all present employees," the receivership said in a statement.
The order affects about 85 percent of Stanford's U.S. workers, although the receivership said most of Stanford's business and operations "will be discontinued or wound down." Those remaining on the payroll, primarily at Stanford's Houston headquarters, would be involved in the shutdown.
According to the receivership's order, those laid off effective Friday will receive no severance and regular salary and benefits will be cut immediately.
The Securities and Exchange Commission has accused Stanford and his finance chief James M. Davis of conducting a "massive Ponzi scheme" through companies they controlled, including Antigua-based Stanford International Bank. Stanford and Davis misappropriated billions of dollars of investors' money.