JURIST - Paper Chase: Financier Stanford pleads not guilty in $7 billion fraud scheme

[JURIST] Billionaire financier Allen Stanford [BBC profile; JURIST news archive] pleaded not guilty Thursday to 21 charges of fraud, conspiracy, and obstruction in the US District Court for the Southern District of Texas [official website] but remained in prison overnight. Prosecutors opposed Stanford's release by filing a memorandum in support of detention [text] Thursday that argues Stanford would pose a flight risk if freed from custody. US Magistrate Judge Frances Stacy stayed [Boston Globe report] Stanford’s release on $500,000 bail until Friday so that federal prosecutors could appeal [Financial Times report].

Stanford was indicted [text, PDF; JURIST report] last week on fraud and obstruction charges related to an alleged $7 billion fraud scheme. Through three of his investment companies, Stanford allegedly violated the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 [texts]. He was charged [complaint, PDF; JURIST report] in February with running a fraudulent investment scheme by selling certificates of deposit on the promise of improbably high interest rates.