Stanford Whistleblower Speaks Out

" First up a scoreboard exclusive. A whistle blower guy who lost his job by asking too many questions about the stuff he was selling for a man named Allen Stanford. Of course this stuff that he was selling -- certificates of deposit that offered on real interest rates that were actually too good to be true. -- this whistleblower blower new -- And he took his story to the regulators but when the regulators had to choose. Between believing him or believing Stanford they chose Stanford and as a result. Thousands of investors lost billions of dollars that's easy to pile on folks like Stanford and Madoff now but there were in jail. But this guy had the guts to question Allen Stanford when he was still king of the world. And for that he was hounded out of the business and for the first time in a Fox Business world explosive he tells this story on national television. Scoreboard is pleased to welcome Charles Satterfield. Mr. Satterfield good to see -- lawyer Charles. You can -- Charles David good to be here thanks so much well that lap last point I can't emphasize enough. It's easy now everybody look at bags has -- you know we made offers are crooks says Stanford even though he's alleged to be a -- we we should receive -- was wrong. But you did it when he was he was sir Allen right."

" Yeah see this newest senator Allen at that time we. Would get emails from time to time announcing that sir Allen would be present on the property tomorrow. And I please have your work place is clean and appropriate for his appearance and I always chuckled at that. I was put those in like sir Allen is the only American I've ever known to use the royal title rather than sir mix a lot. So I made a few of those smart comments on the trading desk in. The we're so that got that some frowns on that that was that appropriate fit fit Stanford at the time he sounds like a pompous idiot. Was -- But. I mean. I -- we're always serve that judgment for those who knew him better. There where the three principles Allen Jim Davis and are pending -- I was in the situation. When I knew there was never anything if what I got to see them about dividend that I would be able to -- say that they would somehow be impressed with their. Or you know even be somewhat friendly to my avoided the -- didn't have much interaction. My I was on the broker's side and not on the bank side I work for Stanford group company in Houston. But out when sir Allen's presence was felt on the property or Jim Davis or alarm I did my best to make sure that I wasn't -- around. Because I knew that anything that I might say or do would probably. You know if you forget to wear your pin on your lapel it would just you know raise their -- and it would probably do more trouble than good so why am I did but I could I think we've all you blind and worked in in situations like that would pompous guzzler and it is no fun but let's let's go back to the beginning for a second here what we're doing before you started with stand with Stanford. -- I traded. Fixed income for a number of international banks in Los Angeles in New York. After the 9/11 I went on to the team that help rebuild Cantor Fitzgerald I was help rebuilding their energy group trade -- down in Houston. And down after I had worked with them for a few years I was introduced to some people at Stanford. There was -- work I was doing at the University of Houston with a global energy management institute down there. A Houston I out of Stanford senior employee was sub and one of the good guys. He was -- involve -- U of H alone he introduced me to the the group -- fixed income group and after a few months to put a deal together and I came over and went to work for the company right now."

" CDs for those who weren't in a business is kind of a boring product report from their a lot of except egg products on Wall Street. But his CD is supposed to be kind of a standard financial -- doesn't give great interest rates. But this was different when did you start realize there were some wrongly CDs."

" The it was so much that there was something wrong with the CDs it was hard questions you have about the firm in general and some of the things that we're going on in the firm and and the way that. That that decisions were made. One of the things I've started I believe it's August of 2005. In the spring of 2006 there was an article that was written by Alison FitzGerald and Bloomberg. That questioned whether Allen was in fact -- direct lineal descendant to Leland Stanford and related to Stanford University. And down the course as I understood it Leland Stanford and his wife had one child. Who died at twelve years old and -- Stanford University is actually Leland Stanford junior university. The money was donated in the name of that child. So if Leland Stanford son died at age twelve how was -- Allen Stanford a direct -- stick that dissent and to this twelve year old boy was that was so there's an aunt wasn't there's something about the products that you were pushing -- their -- red flags. There -- some questions you know balance the answer was -- 206 wealthiest man on the planet. -- EU look at at the time I think that the Treasury's we're trading at about 5%. He was offered about seven and a half percent on the CD. Add into that I think about a 10250. Basis points to the broker. Another hundred basis points or miscellaneous expenses. And his cost of funds was somewhere close to 10%. I'm 500 basis points over treasuries is an astronomical credit risk spread. For a fixed income professional. You would think that if Allen Stanford wasn't facts you know equivalent to Warren Buffett and a great guru who had a great organization. That he would not have to pay such exorbitant rates because risk is commensurate with return and we are we going to want to move things forward a little bit Charles now because we're running out of time but you started to ask questions and what happened. When you started ask those questions. I started there was a restructuring of the organization in early 2007 and I was asked to do some things which I thought were blatantly unlawful. I thought that they -- they were unethical. Me and I started to resistant and say that I had problems with these things. They wanted to time my compensation I was supposedly an independent individual. Or 88. Supposed to be able to talk to advise their clients and give them pay advice. That was -- Biased or tainted in any way -- if they wanted to time my compensation to the sale of one product being the CD so every time that grandma won -- eight -- stay safe investments. I was to say the CD ends you know if somebody else want to deal another investment objective you know I was compensated now going to be compensated supposedly only by the CD. And I refused and I told them that they had told senior management it's sort including the chief compliance officer. That if they wanted me to do this I thought it was unethical that if they wanted me to do this and other things I -- unlawful they had put it in writing. The sign it and those who are going to be it."

" And eventually you work camp as a result correct. -- the day after I had told them that I could not do the things they're asking a -- was put in writing and signed off by the chief compliance officer. I was fired the next day all right now you didn't keep your mouth shut you live in a very brave -- as you know how powerful this guy was even though it was a pompous jerk. He still had some influence with -- people who with some of the regulators you went to Finneran. Which was regulating the industry at the time and what was their reaction when you when you went to them with some of these questions."

" I filed complaints. And in October of 2007. One of the things that Stanford would do is if you challenge and cause trouble and you were AA. Problem for them and they fired -- they would try to discredit you in the industry such that if you said anything and spoke the truth. They would be able to discredit you as a disgruntled former employee and if you Groupe -- Stanford. Disgruntled employee you'll see a number every time someone left the -- complained spoke the truth. They were branded as a disgruntled former employee so on the form that they were required to fill a file with the regulators they put the reason for my termination. Effectively that I was unable to meet expectations which meant that I was fired because I was incompetent. So any -- I said anything they would be able to say don't pay attention and it's sour grapes and why do you think -- were why do you think federal believed Stanford's story about what he was doing rather than yours. I think the culture of fit right is such that they are not going to aggressively investigates ELA matters such as this. I mean in my arbitration hearing. I begged -- the panel of three arbitrators to please send a message."