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61-578: Prior to its demise, Stanford International Bank Limited (SIBL) offered certificate of deposit (CDs) at rates consistently higher than those available from banks in the United States. The bank was started by Allen Stanford in 1986 in Montserrat where it was called Guardian International Bank. Allen Stanford's move into banking utilised funds he had made in real estate in Houston, Texas , in

122-515: A "bump-up" feature. These allow for a single readjustment of the interest rate at a time of the consumer's choosing during the term of the CD. Sometimes, financial institutions introduce CDs indexed to the stock market , bond market , or other indices. Some features of CDs are: Withdrawals before maturity are usually subject to a substantial penalty. For a five-year CD, this is often the loss of up to twelve months' interest. These penalties ensure that it

183-413: A 3-year CD, 2-year CD, and 1-year CD. From that point on, a CD reaches maturity every year, at which time the investor can re-invest at a 3-year term. After two years of this cycle, the investor has all money deposited at a three-year rate, yet have one-third of the deposits mature every year (which the investor can then reinvest, augment, or withdraw). The responsibility for maintaining the ladder falls on

244-413: A company's financial figures were correct. Discussing the company's failure to uncover fraud at Patisserie Valerie, he said: “If people are colluding and there is a sophisticated fraud, that may not be caught by normal audit procedures.” Rachel Reeves MP said “But in a shop that sells tea and cakes, you’d sort of think that might be spotted. It’s not a multinational complex organisation.” She also said that

305-547: A high enough balance level to justify the additional cost. The Certificate of Deposit Account Registry Service program lets investors keep up to $ 50 million invested in CDs managed through one bank with full FDIC insurance. However rates will likely not be the highest available. There are many variations in the terms and conditions for CDs. The federally required "Truth in Savings" booklet, or other disclosure document that gives

366-468: A higher interest rate than currently available from non-callable CDs. If prevailing interest rates decline, the issuer will call the CD and re-issue debt at a lower interest rate. If the CD is called before maturity, the investor is faced with reinvestment risk . If prevailing interest rates increase, the issuer will allow the CD to go to maturity. The amount of insurance coverage varies, depending on how accounts for an individual or family are structured at

427-711: A network of branches throughout the country. There was a run on the bank in February 2009 following the SEC's investigation into Stanford's affairs in the US, and this forced the Venezuelan authorities to seize the bank. It was sold to Banco Nacional de Crédito in May 2009. Mexico 's financial regulator announced on 19 February 2009 that it was investigating the local affiliate of Stanford bank for possible violation of banking laws. In

488-498: A new CD. Generally, there is a "window" after maturity when CD can be cashed out without penalty. In the absence of such directions, the institution may roll over the CD automatically, once again tying up the money for a period of time. Additionally, the CD holder may be able to specify at the time the CD is opened for it not to be rolled over. The Truth in Savings Regulation DD requires that insured CDs state, at

549-440: A period of several years with the goal of having all one's money deposited at the longest term (and therefore the higher rate) but in a way that part of it matures annually. In this way, the depositor claims the longest-term rates while retaining the option to re-invest or withdraw the money in shorter-term intervals. For example, an investor beginning a three-year ladder strategy starts by depositing equal amounts of money each into

610-607: A resident of Mexia, Texas (where Stanford's US interests were based) with cattle ranching and car sales experience. In February 2009, the US Securities and Exchange Commission (SEC) investigated the US operations of the Stanford Financial Group , including the bank. On 13 February Stanford was quoted saying "the bank remains a strong institution". On 17 February 2009, the SEC charged Allen Stanford, Pendergest-Holt and Davis with fraud in connection with

671-738: A series of errors in its 2016 audit of an unnamed company. It found that the auditor had failed to adequately gauge the true value of the company's assets, before flagging them as a “significant risk”. The regulator said the firm had selected too small a sample size and had placed “undue reliance” on the externally appointed experts rather than its own specialist. The FRC also said the auditor had failed “to exercise sufficient professional scepticism and to prepare adequate audit documentation.” The FRC conducted an investigation into Grant Thornton's 2016 audit of Sports Direct . The sports retailer used Barlin Delivery to deliver merchandise to its customers, and in

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732-446: A settlement agreement with VEREIT stockholders to settle pending class action litigation against Grant Thornton regarding among other things alleged violations of Section 11 of the 1933 Act ( In re American Realty Capital Properties, Inc. Litigation and the remaining opt-out actions), at a cost to Grant Thornton of $ 49 million. Recently the US firm in the network declared their highest turnover in history of $ 1.9 billion which

793-434: A “call” feature which allows the issuer to return the deposit to the investor after a specified period of time, which is usually at least a year. When the CD is called, the investor is given back their deposit and they will no longer receive any future interest payments. Because of the call feature, interest rate risk is borne by the investor, rather than the issuer. This transfer of risk allows step-up callable CDs to offer

854-476: Is a multinational professional services company based in London , England. It is the world's seventh-largest by revenue and sixth-largest by number of employees professional services network of independent accounting and consulting member firms which provide assurance, tax and advisory services to privately held businesses, public interest entities, and public sector entities. Grant Thornton International Ltd.

915-427: Is a not-for-profit, non-practising, international umbrella membership entity organised as a private company limited by guarantee, and has no share capital. According to Grant Thornton International Ltd (GTIL), member firms within the global organisation operate in 147 markets employing around 73,000 personnel for a combined global revenue of US$ 7.5 billion. The earliest origins of the name date back to 1904, when

976-511: Is a separate national entity, and governs itself and manages its administrative matters independently on a local basis. This is similar to other professional services networks . Grant Thornton member firms service international work through their local International Business Centres — located in 40 major commercial centres throughout the world. Grant Thornton International Ltd. carries out an annual global research project: The Grant Thornton International Business Report, which (since 1992) surveys

1037-405: Is administratively convenient for the liquidator to have a body to work with. The liquidators reported that an interim distribution may be made in the first quarter of 2012. Certificate of deposit A certificate of deposit ( CD ) is a time deposit sold by banks , thrift institutions , and credit unions in the United States. CDs typically differ from savings accounts because

1098-401: Is also contemplating a tax lien against the assets that could deprive the creditors of a sizable sum. US$ 5 million has already been spent by the liquidators. The liquidators established a multinational creditors committee composed of six larger individual large claimants and one attorney representing a number of individuals. This committee does not have legal status in the liquidation, but it

1159-457: Is generally not in a holder's best interest to withdraw the money before maturity –unless the holder has another investment with a significantly higher return or has a serious need for the money. Institutions may mail a notice to the CD holder shortly before the CD matures requesting directions regarding withdrawal. The notice usually offers the choice of withdrawing the principal and accumulated interest or "rolling it over", i.e. depositing it into

1220-570: Is repeated and the forms are at http://www.sibliquidation.com/claims-administration/ (the URL denoted in the email was erroneous in as much as the "-" was missing between the words "claims" and administration"). On 11 October 2011, the liquidators convened an online creditors’ meeting. The liquidators emphasized that there was a huge shortfall between the available assets and the claims. The claims are around US$ 7 billion. The assets available are estimated to range from US$ 73 million to US$ 1.5 billion. Some of

1281-406: Is what is important. Author Ric Edelman writes: "You don't make any money in bank accounts (in real economic terms), simply because you're not supposed to." On the other hand, he says, bank accounts and CDs are fine for holding cash for a short amount of time. CD rates are correlated with the expected inflation at the time the CD is bought. The actual inflation may be lower or higher. Locking in

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1342-557: The National Credit Union Administration (NCUA) for credit unions. The consumer who opens a CD may receive a paper certificate, but it is now common for a CD to consist simply of a book entry and an item shown in the consumer's periodic bank statements. Consumers who want a hard copy that verifies their CD purchase may request a paper statement from the bank, or print out their own from the financial institution's online banking service. In exchange for

1403-521: The CD has a specific, fixed term before money can be withdrawn without penalty and generally higher interest rates. CDs typically require a minimum deposit, and may offer higher rates for larger deposits. The bank expects the CDs to be held until maturity , at which time they can be withdrawn and interest paid. In the United States, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by

1464-486: The FRC instituted an investigation into Grant Thornton's audits of the failed outsourcing company Interserve between 2015 and 2017. Interserve had amassed debts of £738m following numerous acquisitions, a failed probation service contract and an investment in energy-from-waste plants. Grant Thornton and the partner involved were fined £1.3m by the FRC in 2021 for 'scepticism failure'. The FRC fined Grant Thornton £650,000 over

1525-496: The FRC's rules require auditors to spot material misstatements where they are due to fraud or error. Restructuring firm FRP Advisory investigated whether it could claim against Grant Thornton for failures to identify suspected wrongdoing with Patisserie Valerie accounts, and in November 2020, it issued a claim for damages against Grant Thornton in respect of "negligent audits" of the group companies' financial statements. In 2019

1586-465: The FRC. Patisserie Valerie went into liquidation in January 2019. Later, the chain was found to have overstated its cash position by £30m and failed to disclose overdrafts of nearly £10m. The liquidation lead to the closure of 70 stores and more than 900 job losses. The company's chief executive, David Dunckley, told UK Members of Parliament it was not his firm's job to uncover fraud or to judge whether

1647-459: The High Court of Antigua resolved that Vantis should be removed from its responsibilities. The firm, which had recently received government approval to sell the property assets, appealed the decision. Vantis itself was placed in administration on 29 June 2010 and promptly broken up, with the various offices and businesses being sold as going concerns. Hamilton-Smith and Wastell transferred to

1708-561: The UK firm of Thornton and Thornton was formed in Oxford. Through a series of name changes this firm merged in 1959 with another UK firm, Baker & Co, which traced its origins to 1868, to form the firm Thornton Baker. In 1975 Thornton Baker merged with Kidston, Jackson, McBain, a UK firm which traced its origins to the Glaswegian accountant, Robert McCowan, who set up in practice in 1844, and

1769-879: The United States District Judge David Godbey froze all of the Stanford personal and corporate assets in the US and appointed Ralph Janvey of Dallas as receiver . Janvey retained control until the SEC suit is resolved. On 19 February 2009, Nigel Hamilton-Smith and Peter Wastell of the British accounting firm Vantis were appointed joint receivers of the bank, and were made liquidators on 15 April 2009. In February 2010, Vantis' auditors Ernst & Young expressed concern about whether Vantis would receive payment for its work on Stanford. Properties in Antigua emerged as an important part of

1830-530: The United States to establish the organisation of Alexander Grant Tansley Witt. This organisation operated successfully for 10 years. In 1980 Alexander Grant & Co and Thornton Baker, firms with similar qualities, clients, personnel numbers and values, joined with 49 other firms to form a global organisation, Grant Thornton. In 1986, Alexander Grant & Co and Thornton Baker changed their names to Grant Thornton, reflecting their mutual affiliation and strategic alignment. In December 2019 Grant Thornton placed in

1891-568: The alleged fraud. On that day the SEC said that Stanford and his accomplices operated a "massive Ponzi scheme ", misappropriated billions of investors' money and falsified the Stanford International Bank's records to hide their fraud. "Stanford International Bank's financial statements, including its investment income, are fictional," the SEC said. In 2007 the bank formed a subsidiary in Venezuela , which rapidly developed

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1952-448: The assets are harder to liquidate, such as property. Therefore, patience will be required to obtain the highest values in the long-term. Another goal of the liquidators is to avoid litigation that could be costly. The liquidators reported that they had met with a number of representatives of various national governments. These governments each have taken their own independent legal actions under their regulatory and/or court systems. The USA

2013-454: The audit file which indicated involvement. Grant Thornton was ordered to pay £21 million, the second-largest award against a UK auditor, in damages to its former client AssetCo, a fire engine leasing company, plus £5 million to pay Assetco's legal costs. The judge found it had committed negligence “of the utmost gravity”. An appeal judge reduced the damages to £20.8m, before a 25% deduction for contributory negligence. After being appointed as

2074-403: The bank's US$ 8 billion certificate of deposit (CD) investment scheme that offered "improbable and unsubstantiated high interest rates". This led the federal government to freeze the assets of the bank and other Stanford entities. In addition, the bank placed a 60-day moratorium on early redemptions of its CDs. On 27 February 2009, Pendergest-Holt was arrested by federal agents in connection with

2135-507: The buyout firm FRP Advisory , and continued their legal fight to be reinstated as liquidators of Stanford. In May 2011 following a claim made to the Eastern Caribbean Court of Appeal, Hamilton-Smith and Wastell were removed as liquidators. On 12 May 2011, Marcus Wide and Hugh Dickson of the international accounting firm Grant Thornton were appointed the new liquidators by the High Court of Antigua. In September 2011, it

2196-411: The company £1.95m for ethical failures after it tried to conceal evidence of involvement in the audit of the failed alcohol retailer Conviviality Retail. The regulator found that the company had not maintained an independent stance during the audit and had committed “firm-wide” ethical failings between 2014 and 2017. Senior manager Natasha Toy was severely reprimanded after she tried to remove an entry from

2257-496: The company's assets, to be sold to enable payment of creditors and Vantis' own fees. In June 2010, it was announced that the liquidators and the US receiver had entered into a co-operation agreement, under which the liquidators were to deal with the realisation of the bank's assets in Antigua and the United Kingdom, and the US receiver was to deal with the realisation of the bank's assets in the US and Canada. In June 2010,

2318-468: The customer depositing the money for an agreed term, institutions usually offer higher interest rates than they do on accounts that customers can withdraw from on demand (though this may not be the case in an inverted yield curve situation). Fixed rates are the most common offering for CDs, but some institutions offer CDs with variable rates. For example, in mid-2004, interest rates were expected to rise, and many banks and credit unions began to offer CDs with

2379-820: The depositor, not the financial institution. Because the ladder does not depend on the financial institution, depositors are free to distribute a ladder strategy across more than one bank. This can be advantageous, as smaller banks may not offer the longer-term of some larger banks. Although laddering is most common with CDs, investors may use this strategy on any time deposit account with similar terms. The best interest rates are generally offered on "Jumbo CDs" with minimum deposits of $ 100,000. Jumbo CDs are commonly bought by large institutional investors, such as banks and pension funds, that are interested in low-risk and stable investment options. Jumbo CDs are also known as negotiable certificates of deposit and come in bearer form. These work like conventional certificates of deposit that lock in

2440-414: The disclosures allowed them to do so. The penalty for early withdrawal deters depositors from taking advantage of subsequent better investment opportunities during the term of the CD. In rising interest rate environments, the penalty may be insufficient to discourage depositors from redeeming their deposit and reinvesting the proceeds after paying the applicable early withdrawal penalty. Added interest from

2501-499: The early 1980s. There was no direct connection between Stanford's insurance business in Texas and the banking business. Stanford relocated its operations to Antigua . The bank's portfolio was overseen by an investment committee consisting of Allen Stanford; his father; Laura Pendergest-Holt , Stanford Financial Groups' Chief Investment Officer; James M. Davis (Allen Stanford's college roommate), CFO of Stanford International Bank; and

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2562-537: The economic value of a CD rises when market interest rates fall, and vice versa. Some banks pay lower than average rates, while others pay higher rates. In the United States, depositors can take advantage of the best FDIC-insured rates without increasing their risk. As with other types of investment, investors should be suspicious of a CD offering an unusually high rate of return. Conman Allen Stanford used fraudulent CDs with high rates to lure people into his Ponzi scheme . Grant Thornton Grant Thornton

2623-472: The firm at approximately £1.3 billion. This decision came after proposals of merging with US sister firm Grant Thornton LLP and bids from Swedish firm EQT did not go through. The transaction remains subject to partner ratification and regulatory approvals. Although many of the firms now carry the Grant Thornton name, they are not all members of one international partnership. Each member firm

2684-560: The institution. The level of insurance is governed by complex FDIC and NCUA rules, available in FDIC and NCUA booklets or online. The standard insurance coverage is currently $ 250,000 per owner or depositor for single accounts or $ 250,000 per co-owner for joint accounts. Some institutions use a private insurance company instead of, or in addition to, the federally backed FDIC or NCUA deposit insurance. Institutions often stop using private supplemental insurance when they find that few customers have

2745-504: The interest rate for a long term may be bad (if inflation goes up) or good (if inflation goes down). For example, in the 1970s, inflation increased higher than it had been, and this was not fully reflected in interest rates. This is particularly important, for longer-term notes, where the interest rate is locked in for some time. This gave rise to amusing nicknames for CDs. A little later, the opposite happened, and inflation declined. In general, and similar to other fixed-interest investments,

2806-623: The interests of the administrator – and those they represent – and the vulnerable customers who owe money to BrightHouse." In September 2022, Western Australia 's Corruption and Crime Commission (CCC) found that Grant Thornton Australia had bribed senior public servants to secure lucrative consulting work from the state government. A CCC report found that two senior officials in the Department of Communities had been given over $ 100,000 worth of alcohol, meals, gifts, sporting tickets, flights and accommodation. Additionally, Grant Thornton employed

2867-553: The liquidator of the failed retailer Brighthouse , Grant Thornton was accused of maximising returns to creditors at the expense of vulnerable customers. The company was found to be offering the 140,000 rent-to-own customers an initial 28-day payment holiday, one-third of the period recommended by the FCA . Mick McAteer, co-founder of the Financial Inclusion Centre thinktank, said: “There is a potential conflict between

2928-412: The new higher yielding CD may more than offset the cost of the early withdrawal penalty. While longer investment terms yield higher interest rates, longer-term also may result in a loss of opportunity to lock in higher interest rates in a rising-rate economy. One mitigation strategy for this opportunity cost is the "CD ladder" strategy. In the ladder strategies, the investor distributes the deposits over

2989-424: The principal amount for a set timeframe and are payable upon maturity. Step-up callable CDs are a form of CD where the interest rate increases multiple times prior to maturity of the CD. Typically, the beginning interest rate is higher than what is available on shorter-maturity CDs. These CDs are often issued with maturities up to 15 years, with a step-up in interest happening at year 5 and year 10. These CDs have

3050-480: The process made large undisclosed payments to Barlin, which was owned by John Ashley, the brother of Sports Direct's owner Mike Ashley. The FRC examined Grant Thornton's failure to disclose the relationship between Sports Direct and Barlin. In 2020 the UK Court of Appeal determined that Sports Direct did not have to disclose 40 documents sought by the FRC because they were covered by legal privilege. The FRC fined

3111-482: The real rates of return offered by CDs, as with other fixed interest instruments, can vary significantly. For example, during a credit crunch banks are in dire need of funds, and CD interest rate increases may not track inflation. The above does not include taxes . When taxes are considered, the higher-rate situation above is worse, with a lower (more negative) real return, although the before-tax real rates of return are identical. The after-inflation, after-tax return

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3172-427: The terms of the CD, must be made available before the purchase. Employees of the institution are generally not familiar with this information ; only the written document carries legal weight. If the original issuing institution has merged with another institution, or if the CD is closed early by the purchaser, or there is some other issue, the purchaser will need to refer to the terms and conditions document to ensure that

3233-505: The time of account opening, the penalty for early withdrawal. It is generally accepted that these penalties cannot be revised by the depository prior to maturity. However, there have been cases in which a credit union modified its early withdrawal penalty and made it retroactive on existing accounts. The second occurrence happened when Main Street Bank of Texas closed a group of CDs early without full payment of interest. The bank claimed

3294-420: The top 50 global employers for diversity and inclusion (D&I), according to a new index developed by Universum. More than 247,000 business and engineering/IT students rated Grant Thornton against support for gender equality, commitment to diversity & inclusion and respect for its people. Their perception of Grant Thornton, against these three categories, places the network 28th in the list, alongside some of

3355-472: The views and expectations of over 10,000 privately held mid-market businesses across 28 economies. In 2018, the UK's FRC fined Grant Thornton £4m, later reduced to £3m, for misconduct over its audits of Nichols plc and the University of Salford . Three partners were given personal fines of £60,000. In 2021 the FRC fined Grant Thornton £4m for failures in its audits of Patisserie Valerie . The £4m fine

3416-399: The withdrawal is processed following the original terms of the contract. There may be some correlation between CD interest rates and inflation. For example, in one situation interest rates might be 15% and inflation 15%, and in another situation interest rates might be 2% and inflation may be 2%. These factors cancel out, so the real interest rate is zero in both of these examples. However

3477-538: The world's most well-known and respected global brands. In 2018 Grant Thornton UK LLP, the UK member firm of the network, was fined £4 million for audit misconduct after a former partner joined the audit committees of two organisations while Grant Thornton UK LLP was still auditing them. Later that year, for unrelated reasons, Grant Thornton UK LLP's chief executive Sacha Romanovitch, their first female chief executive, announced she would step down. In September 2019, Grant Thornton (along with other defendants) entered into

3538-423: Was a YoY increase of 5.4% over the previous year. In January 2024, the company announced the appointment of Malcolm Gomersall as its new chief executive, replacing David Dunckley who stepped down earlier in the same month. In November 2024, Grant Thornton UK agreed to sell its majority stake to private equity firm Cinven , marking one of the largest private equity deals in the UK accounting sector, which valued

3599-697: Was a founder of the Institute of Accountants and Actuaries in Glasgow in 1853. In the US, 26-year-old Alexander Richardson Grant founded Alexander Grant & Co in Chicago in 1924. Grant had been a senior accountant with Ernst & Ernst (now EY ). Alexander Grant was committed to providing services to mid-sized companies. When Grant died in 1938, Alexander Grant & Co survived the change in leadership and continued to grow nationally. In 1969, Alexander Grant & Co joined with firms from Australia, Canada, and

3660-406: Was reduced to £2.34m, mainly due to Grant Thornton’s co-operation with the investigation. The auditor responsible, David Newstead, was also fined £150,000, reduced to £87,750, and was banned from carrying out audits for three years. Grant Thornton had lost the audit of Patisserie Valerie in 2019 after it failed to spot a £94m accounting black hole in its books, thereby triggering an investigation by

3721-628: Was reported that the U.S. Justice Department was investigating whether a Swiss subsidiary of Société Générale was used to channel funds to Stanford's personal accounts and failed to follow due diligence procedures or to ask questions about irregular banking activity. On Friday, January 20, 2012, an email was sent by the Joint Liquidators to creditors who had been depositors, the "Fraud Victims" urging them to resubmit their claims. They were given some hope of an "interim distribution" but no imminent final sale of some major assets. The information

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