(CN) - A former regional enforcement director for the Securities and Exchange Commission tried to influence an investigation of the Stanford Group Company by his former colleagues according to an SEC order barring him from practice before the commission for one year.
Spencer C. Barasch worked in the commission's Fort Worth Office as the Associate District Director for the Division of Enforcement from June 1998 to April 2005. The order says that from 1998 to 2003, "Barasch participated personally and substantially in several decisions relating to the Commission's response to allegations that various entities associated with Robert Allen Stanford, including Stanford Group Company violated the federal securities laws in connection with the sale of Stanford International Bank's self-styled 'certificates of deposit.'"
The same year Barasch retired from the SEC he asked its Ethics Office if he could represent Stanford Group in an inquiry being conducted by the commission. The Ethics office told him he was permanently barred from working for the company in the matter because it was "the same as or substantially related to matters he participated in while a Commission employee," the order says.
Barasch waited a year and then took on Stanford Group as a client billing them for 12 hours of work in 2006, around the time the SEC launched investigation into the sale of the company's "certificates of deposit."
The order says Barasch called a colleague at the Forth Worth office asking for information about the investigation. When that staffer asked if it was proper for Barasch to be contacting him and referred him to the Ethics Office, Barasch tried to minimize his work for Stanford.
Barasch did call the Ethics Office a second time and was again informed that it was improper both for him to represent Stanford in the matter and to call upon his former colleagues. Heeding this admonition, the order says Barasch stopped working for Stanford.
Barasch has already paid $50,000 to settle a Department of Justice complaint against him for representing Stanford. In light of the fine, the SEC said it would ban him from practice before the commission for one year after which he could apply for reinstatement.
Barasch is a partner at Andrews Kurth in Dallas, Texas where he heads the firm's corporate governance and securities enforcement team.
After three years of investigation, Robert Allen Stanford was arrested by the FBI for running a $7 billion Ponzi scheme centering on the certificates of deposit.
Stanford's trial was delayed for nearly three years after he was beaten-up by a fellow inmate in pre-trial detention. In March, a Houston jury convicted him of 13 counts of fraud in relation to the Ponzi scheme.