US financial services regulator to begin public hearing against convicted felon, Leroy King

Former Chief Executive Officer of the Financial Services Regulatory Commission, Leroy King (file photo)
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By Elesha George

[email protected]

The financial services regulator of the United States – the US Securities and Exchange Commission (SEC) – will begin a public administrative proceeding against Leroy King, for allegations he admitted to during a criminal case regarding his involvement in the Allen Stanford Ponzi Scheme.

The Commission said it thought it was “appropriate” and in the “public interest” to hold a public hearing on the issue, given how King’s wrongdoings affected other areas of his profession.

King was a former Administrator and Chief Executive Officer of the Financial Services Regulatory Commission (FSRC) in Antigua and Barbuda.

In his position, which he held from 2002 to 2009, he admitted to accepting more than half a million US dollars in cash from Stanford in order to look the other way while the American investor made false representation of his business operations to authorities in the US.

He also pleaded guilty to obstructing a proceeding before the Commission and conspiracy to obstruct a Commission proceeding before the United States District Court for the Southern District of Texas.

King will be afforded an opportunity to respond to these allegations which he admitted to in exchange for a plea deal on January 30, 2020.

In connection with his plea agreement, King admitted that:

(1) As the Administrator and Chief Executive Officer of FSRC, an agency of the Antiguan government, he was “responsible for Antigua’s regulatory oversight of SIBL’s investment portfolio, including the review of SIBL financial reports and the response to requests by foreign regulators, including the SEC, for information and documents about SIBL’s operations.”

(2) He accepted approximately $520,963.87 in cash payments, Super Bowl tickets, and “repeated flights on private jets owned and controlled by Stanford or SFG entities,” in exchange for:

(a) “Causing the FSRC to fail to exercise its regulatory function by independently verifying the existence and value of SIBL’s investments, instead relying on the numbers provided by Stanford, Davis, and others;

(b) Corruptly providing to Stanford, Davis, and others information about official inquiries that the FSRC had received from multiple regulators, including the SEC…;

(c) Allowing Stanford and his employees to draft responses back to these regulators that contained false and misleading statements and assertions, after which FSRC letterhead would be attached, and the letter would be sent out as if it had been prepared by the FSRC; and

(d) Making false representations in response to the official inquiries of regulators, including the SEC.”

The hearing will consider whether allegations prompted by an investigation by the US Division of Enforcement are true; and what, if any, remedial action is appropriate in the public interest. 

After the public hearing, the US financial regulator will issue an initial decision that includes findings of fact and legal conclusions. The decision will also contain sanctions to include mandatory fines or bans against King preventing him from performing certain business operation or act in certain capacities with relation to US financial markets.

In 2019, several years after the US government issued a request for his extradition, King was transferred from Antigua and Barbuda to face charges for his alleged role in connection with the Stanford International Bank Limited (SIBL) $7 billion investment fraud scheme.

The court had sentenced King, a dual citizen of both the United States and Antigua and Barbuda, to a prison term of 120 months, three years of supervised release following his jail term, and a $200 fine.

The 76-year-old remains in the custody of the FCI Butner Medium I, a medium security federal correctional institution.

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