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This is in three parts. First, you might want to read this post, which is sort of a prologue, and is about reactions to the case in Baldwin, Mississippi (where Pendergest-Holt, the number three at Stanford, and James Davis, the number two, both live). Part two is linked at the end of this one.

Stanford Financial Group (SFG) controlled Stanford International Bank (SIB) and two Houston-based entities: Stanford Group Company (SGC) and Stanford Capital Management (SCM).

There are some unnamed players here– SFG Executive A, a member of the board and shareholder of SFG and related entities including SIB. That must be Stanford himself, who according to the Wall Street Journal Blog, is one of two executives charged with Pendergest-Holt in the SEC’s civil action.

SFG Executive B is a member of the board and officer of SFG and purportedly manages the SIB portfolio with Pendergest-Holt from Memphis and Tupelo. That’s Davis, the other one charged in the civil action, who is described in the Memphis Flyer story I quoted earlier (and which you might want to read first) as Pendergest-Holt’s supervisor and (according to the Tupelo Daily Journal), her “visionary mentor.” The Tupelo Daily Journal, by the way, says that Davis and Stanford were college roommates.

Davis (pictured below) took the Fifth Amendment in filings in the SEC’s civil suit, according to the Tupelo Journal biz buz site.

Another player is Attorney A, who was retained by SFG for regulatory matters.  According to this, the New York Times has reported that the lawyer who was with Pendergest-Holt when she had her talk with the SEC was Thomas Sjoblom, a partner in the New York law firm Proskauer Rose. According to his bio on his firm site, he had been with the SEC for 20 years and had been the Assistant Chief Litigation Counsel in the Division of Enforcement. He represented Richard Scrushy in his securities law troubles.  He’s pictured below.

These three unnamed players have been perspiring for some time.

Additionally, there are three SFG employees whom the FBI chooses to call “Cooperating Witness 1″ (CW1), CW2, and CW3. This last has an ominous sound to it for the first three unnamed players and Ms. Pendergest-Holt.

Pendergest-Holt has an undergrad degree in math (the Memphis Flyer piece says from MUW) and a masters in math from Mississippi State according to the Daily Journal, and was hired as a research analyst in 1997. The Tupelo Daily Journal says she had no prior financial experience; she was 25 and right out of college. Says the DJ:

She was a speaker at the University of Mississippi School of Business Administration’s annual banking and finance symposium in November, which Stanford sponsored.

This is pictured below. About this, the dean of the business school says, “She was very knowledgeable and talked a good bit about global markets and the opportunities in global finance.”

She was appointed to the SIB “Investment Committee” in 2005 and was Chief Investment Officer of SFG. Pengergest-Holt “helped produce the Sandford Investment Model” and reviewed monthly and quarterly financial reports published by SIB.

SIB is an offshore bank that purports to have an independent Board of Directors, Investment Committee, Chief Investment Officer, and a team of research analysts. Its primary product is CDs. It sold $8B of these, promising high returns– 7.45% in June of 2005, 7.878% in March of 2006. SIB claimed to have investments in three tiers– Tier I (cash and cash equivalent), Tier II (investments with “outside portfolio managers,” overseen by Pendergest-Holt), and Tier III (“unknown assets under the apparent control of SGC Executive[s]” A & B). Tier I was 9% ($800M), Tier II 10% and Tier III the remaining 81%.

Since Tier III at 81% seems to be either the “secret ingredient” or that part of the map that hasn’t been drawn yet (“there be dragons there”), it’s not looking good for the investors.

And that’s where the SEC comes in, starting an investigation mid-year last year, culminating in a subpoena to SFG, Executives A and B, and Ms. Pendergest-Holt. At which point everyone goes to meet in Florida to decide what to tell the SEC and (ominously for Ms. Pendergest-Holt) who is to tell it.

Read part two here.

Note: Unless specifically stated, the facts are from the FBI affidavit attached to the criminal complaint filed against Ms. Pendergest-Holt, which will be attached to a later post.

Corrected to add her masters in math from MSU, as per duckweedpond.