BR INVESTORS SUE STANFORD ADVISERS
A group of 10 Baton Rouge area investors filed suit March 17 in 19th Judicial District Court against six Stanford Group Co. and Stanford Capital Management advisers and four insurance companies. The suit alleges negligence on the part of the advisers, saying they recommended the purchase and/or renewal of CDs from Stanford International Bank and received above market commissions on the sale of those CDs.
Hoping to halt what it called “a fraud of shocking magnitude that has spread its tentacles throughout the world,” the SEC charged billionaire R. Allen Stanford and other executives at his massive financial services company with operating an $8 billion fraudulent investment scheme. In a complaint filed in mid-February in U.S. District Court in Dallas, the SEC alleged Antigua-based Stanford International Bank fabricated investment returns in order to market and sell high-yielding CDs. The SEC immediately acted to freeze all of Stanford’s assets, with the FBI also breathing down the company’s neck. The FBI is now asking investors to come forward.
In 2007 Stanford officials claimed $2 billion had been collected from investors through the group’s Baton Rouge and Lafayette offices, a figure some in local financial circles find dubious. Still, it is clear a number of Baton Rouge and Lafayette investors stand to lose millions in this latest financial scandal.
In their suit, the Baton Rouge investors allege that because of the marketing plan and commission structure, the advisers failed to inquire about material facts and risks of the Stanford International Bank’s CDs — the kinds of risks any adviser should have known and understood — and as a result failed to inform the plaintiffs of the risks. “In truth and in fact, the ‘bank’ was a speculative highly leveraged hedge fund and the so-called ‘certificates of deposit’ were nothing more than a high-risk ultra speculative mezzanine type of junk bond,” the lawsuit states.
Advisers allegedly promised an 8 percent return on the so-called CDs, much higher than any traditional CDs have yielded in almost two decades.
Stanford’s local office was headed by Hank Mills (one of the defendants in the Baton Rouge case, who also is the brother of state Rep. Fred Mills) and Tiffany Angelle, the one-time marketing director of Farmers-Merchants Bank, where Fred Mills serves as president. Angelle’s bio on the Stanford Web site indicates she left the bank to join Stanford Group Co. in 2004 with more than five years of experience and a bachelor’s degree in finance from UL Lafayette. A press release in early 2008 noted her promotion to vice president/financial adviser in Lafayette. Stanford’s Lafayette office was on Silverstone Road in River Ranch’s Town Square.
Local business people maintain that Stanford targeted very wealthy investors in the Acadiana area. So far, none of those investors has come forward with any legal action against the company, making the Baton Rouge lawsuit the first in the state.
COURTESY DROPS SATURN LINE
No official word has come down from General Motors on what it plans to do with its Saturn brand — although the car maker is toying with the idea of selling or eliminating it altogether — but Don Hargroder has decided Saturn won’t be sold in Lafayette. At least not by him.
Late last year Hargroder, who owns the fast-expanding Courtesy Automotive Group, purchased the Saturn dealership and the Ambassador Caffery Parkway real estate that houses it from Lafayette’s Mann family. Then General Motors announced it hoped to sell Saturn, creating a level of uncertainty Courtesy wasn’t willing to gamble with. “We’re just not sure about the future of Saturn,” says Courtesy General Manager Paul Stroderd. The inventory was recently moved to the back of the Ambassador site, Stroderd says. “In the state of Louisiana you have the option to tell the factory to come pick up [the inventory],” he maintains. “Saturn basically buys them back.”
Courtesy will service Saturn automobiles through March 26, and Stroderd says Saturn is exploring other avenues to have the cars serviced after that time. “We don’t want to leave customers out in the cold,” he says. “If it’s an emergency situation, a Saturn owner has the right to go to any GM dealer.”
Dropping the Saturn line has cleared the way for relocating Mazda, which is now located on property Courtesy leases at 5001 Johnston St. “We have an option to get out of the lease,” Stroderd says, noting that Courtesy had initially planned to build a new Mazda dealership next to Saturn. It is now awaiting Mazda’s approval to move the vehicles to Ambassador Caffery.
Courtesy’s main dealership — where GMC trucks, Cadillac, Buick and Pontiac are sold — is at 4750 Johnston St. in the old Service Merchandise building. Hargroder also has dealerships in New Iberia, Abbeville, Franklin and Morgan City.
IZZO’S ILLEGAL BURRITO COMING SOON
After scouting the local market for more than five years, Baton Rouge-based Izzo’s Illegal Burrito has finally settled on a location for its first Lafayette restaurant. The “fast-casual” chain, which specializes in oversized burritos, already has plans for additional expansion in the Lafayette area. “We would like to open at least three,” says Ozzie Fernandez, who co-owns the company with Gary Kovacs.
Izzo’s entered the Baton Rouge restaurant scene in 2001, opening its first location at the gates of LSU. Its appeal to college students helped drive the choice of location in Lafayette, Fernandez says. The Lafayette restaurant is opening at 2008 Johnston St. on the left end-cap of the Interior Fabric Shoppe building. “It’s a great fit to be close to campus,” he says.
Izzo’s now has three Baton Rouge locations; the fourth store is opening on Veterans Boulevard in Metairie March 17 and the fifth on Prien Lake Road in Lake Charles this May — both owned by different franchisees. The Lafayette Izzo’s, slated to open by July, is a corporate store. The restaurant also offers quesadillas, tacos, nachos and burritos in a bowl — what are known to most of us as salads. The low-cost, fast-casual concept means customers place and pick up their orders at the counter, with a wide selection of fresh ingredients right in front of them.