Basseterre, St Kitts, 18 February 2010 – It has been brought to the attention of the authorities that a group purporting to represent the interests of individuals who have been the alleged victims of financial malpractices By Allen Stanford have allegedly filed a class action suit in Dallas against the Bank of Antigua, Eastern Caribbean Central Bank, Antigua Commercial Bank Ltd, St. Kitts-Nevis-Anguilla National Bank Ltd, East Caribbean Financial Holding Company Ltd, National Commercial Bank (SVG) Ltd, National Bank of Dominica Ltd and the Government of Antigua and Barbuda. Whatever the intentions of the group, the facts of relevance in this matter are the following: · The Bank of Antigua is an institution licensed under the Banking Act No. 14 of 2005 of the laws of Antigua and Barbuda. It is not an offshore bank and is therefore regulated By the Eastern Caribbean Central Bank (ECCB). · The Bank of Antigua suffered a classic bank run in the week beginning 16 February 2009 precipitated By the publication of negative statements regarding its lone shareholder, Allen Stanford, the subsequent filing of a civil complaint against him By the United States Securities and Exchange Commission (SEC), and the appointment of a receiver, Mr Ralph Janvey, over all his assets, By the United States District Court of Dallas. The run threatened the capacity of the Bank of Antigua to remain a viable entity and in the process put at risk the interest of depositors and creditors of the bank, the great majority of whom were citizens of Antigua and Barbuda. · The possible failure of the Bank of Antigua also had the capacity to destabilize the banking and financial system in Antigua and Barbuda, and By extension that of the Eastern Caribbean Currency Union (ECCU) because of its participation in the clearing and settlement system. · In order to avoid a financial crisis, the ECCB, on the direction of the Monetary Council and in accordance with its Emergency Powers, conferred on it By Part IIA , Article 5B of the ECCB Agreement 1983 set out as a schedule to the ECCB Act No 10 of 1983 of the laws of Antigua and Barbuda, assumed control of the Bank of Antigua on 20 February 2009. This is the classic role of a banking regulator or lender of last resort conferred on central banks from time immemorial. In recent times, in the current crisis this is a familiar occurrence in the United States where many financial institutions have been taken over By the regulatory authorities to prevent financial meltdown and to protect depositors and creditors. · The Central Bank in the circumstances provided liquidity support to the Bank of Antigua at significant cost to the Governments and people of the ECCU to prevent the failure of the Bank of Antigua and to protect the financial system against systemic threats. · A management company, Eastern Caribbean Amalgamated Financial Company Ltd was appointed to manage the Bank of Antigua on behalf of the Central Bank and return it to normalcy. The company comprises representatives from the indigenous banking sector, namely Antigua Commercial Bank Ltd, East Caribbean Financial Holding Company Ltd, National Commercial Bank (SVG) Limited, National Bank of Dominica Ltd and St. Kitts-Nevis-Anguilla National Bank Limited and, the Government of Antigua and Barbuda. · The Central Bank has been in regular contact with the United States Securities and Exchange Commission and Mr Ralph Janvey the US Receiver of the Stanford Estate. It should be noted that neither parties have challenged the legality or propriety of the Central Bank’s assumption of control of the Bank of Antigua in the circumstances described above. · The Bank of Antigua has been under the legal control of the Central Bank since 20 February 2009. Contrary to the alleged claims By the group, the Central Bank has not sold or otherwise disposed of the property, assets and undertaking of or any shareholding of the bank. The Central Bank has continued to support the institution while the management company continues to nurture the bank back to health under the direction of the Central Bank. The Central Bank is now engaged in carrying out the legal and financial arrangements to bring a satisfactory closure to this matter. Source: Eastern Caribbean Central Bank
