Former US security regulator could face prosecutors

United States Federal authorities are considering whether to prosecute a former securities regulator in Texas, for repeatedly blocking investigations of Allen Stanford’s offshore banking empire.



Giving testimony during a hearing of the Senate Banking Committee yesterday, Securities and Exchange Commission Inspector General David Kotz said his office has had discussions about pursuing criminal action against Spencer C. Barasch.



Barasch played a key role in deciding against mounting formal investigation of Stanford, who the commission has since accused of running a 7 billion US dollar Ponzi scheme.



In a report issued ealier this year, Kotz said that Barasch later represented Stanford despite ethics laws against doing so.



Under questioning, Kotz said he'd learned that the SEC would ask the State Bar of Texas to investigate Barasch for disciplinary violations.



Kotz delivered his testimony that examined how the SEC's Fort Worth office missed several opportunities to stop Stanford's alleged scheme before it grew larger.