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Caribbean regulators have taken over the Bank of Antigua, owned by the Stanford group, amid fraud accusations.

Fraud charges have been filed against the US businessman

The move comes after governments elsewhere, including in Peru, Venezuela, and Ecuador, suspended operations at banks owned by the group.

Sir Allen Stanford stands accused by US financial authorities of involvement in an $8bn (£5.6bn) investment fraud. He was served civil papers on Thursday.

The billionaire had been the single biggest private investor in Antigua.  The Securities and Exchange Commission (SEC) has accused Sir Allen of an alleged fraud “of shocking magnitude”. However, he is not in custody and has not been charged with any criminal violations.

Authorities in the US claim that Sir Allen attracted clients by promising unrealistic returns on investments. Customer accounts held by Stanford Financial Group were frozen until legal claims could be resolved, Reuters news agency reported the company’s receiver as saying on Friday.

“For the foreseeable future, customers cannot use their accounts to make payments because transfers out of these accounts are frozen until the receiver is able to verify there are no legal or equitable claims against those accounts,” said Ralph Janvey, a Dallas lawyer responsible for recovering Stanford assets.

Earlier in the day, the England and Wales Cricket Board (ECB) ended all contractual links with the billionaire.

The ECB had signed a multi-million dollar deal with the Texan to stage a series of Twenty20 cricket games and tournaments both in the Caribbean and in England.

The England team will not take part in any future Stanford Super Series matches, and the Stanford-sponsored Quadrangular Twenty20 games planned for England in 2009 will not now take place.

‘Unusual withdrawal’
The Eastern Caribbean Central Bank says it took control of the Bank of Antigua to prevent a run on the bank after the SEC filed civil fraud charges against Sir Allen in the US. The bank was not named in the SEC’s complaint.

The central bank said it had taken the step after “an unusual and substantial withdrawal of funds”. The move by Antigua regulators is aimed at maintaining stability and reassuring customers, correspondents say.

Antigua’s Financial Services Regulatory Commission has named a British firm, Vantis Business Recovery Services, as a receiver of Stanford International Bank and Stanford Trust Company, the Associated Press reports.

In 2006 Sir Allen was knighted by Antigua and holds Antiguan citizenship.

Press secretary says TV reporter ‘doesn’t know what he’s talking about’

WASHINGTON – The White House on Friday dismissed a cable television reporter’s criticism of President Barack Obama’s housing bailout plan as the ranting of an individual who “doesn’t know what he’s talking about.”

In a report on CNBC on Thursday, Rick Santelli animatedly accused the Obama administration of “promoting bad behavior” with its $75 billion lifeline to millions of Americans on the brink of foreclosure. White House press secretary Robert Gibbs poked fun at Santelli by inviting him to come to the White House to read the details of Obama’s plan. “I’d be happy to buy him a cup of coffee,” Gibbs said. In a nod to Santelli’s caffeinated style, Gibbs then wryly added: “Decaf.”

Santelli took the critique in stride, saying Gibbs had hardly offered tough words.

“I think this is terrific that this has been opened up to national debate,” Santelli said in an MSNBC interview shortly after Gibbs’ daily briefing wrapped up. “I think it’s wonderful he invited to me to the White House. I’m really not big on decaf, though. I think I’d prefer tea.”

The episode underscores how closely the Obama White House, like others before it, monitors how media coverage may be shaping public opinion. In particular, the constant chatter of cable television news shows has at times gotten under the skin of White House aides, and they have made no effort to hide their displeasure.

In less than two months, regulators have seized 14 banks. Experts think many more banks will collapse before the financial crisis is over.

NEW YORK (CNNMoney.com) — If it’s Friday, there must be a bank failing somewhere across the country.

For six consecutive weeks, industry regulators have seized control of a bank after the market closed on Friday, bringing the total number of failed banks so far this year to 14.

To put that into perspective, 25 banks failed in 2008, suggesting that the rate of failures is quickening as the economic crisis deepens.

“We’ll have a banner year [of failures] this year,” said Stuart Greenbaum, retired dean and professor emeritus at the Olin Business School at Washington University in St. Louis.

At the current rate, nearly 100 institutions — with a combined $50 billion in assets — will collapse by year’s end.  The latest is Oregon’s Silver Falls Bank, which was closed by U.S. regulators Friday.

With more consumers and businesses likely to default on loans as the recession drags on, some industry observers think the pace of bank failures could accelerate further.

Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, upped his expectations for bank failures earlier this month, warning that he anticipates 1000 institutions could fail over the next three to five years.

“The sooner the bank regulators can shut down the troubled banks, the faster the industry will get back on its feet, in our view,” he wrote.

Still, the current crop of bank failures hardly comes close to what happened during the savings & loan crisis two decades ago  More than 1,900 financial institutions went under during 1987-1991, peaking with the failure of 534 banks in 1989.  And many experts are quick to draw distinctions between the two eras.

During the last crisis, many savings and loans were coping with an inability to adapt to higher interest rates, while many banks were significantly undercapitalized to deal with losses.

“That is not our problem here,” noted Ann Graham, a professor of law at Texas Tech who spent part of her career as a litigator for the FDIC and Texas’ Department of Banking during the 1980s.

Instead, she said the main problem now is that banks have been stuck with assets in their loan and investment portfolios that have quickly soured.

It’s also worth remembering that when banks fail, they don’t close down for good. The Federal Deposit Insurance Corp. guarantees deposits up to $250,000 in single accounts. Also, the FDIC often is able to find a willing buyer for the failed bank immediately, which means little, if any, disruption for the failed bank’s customers.

Still, regulators face a crisis of significantly larger proportions today that promises to keep the nation’s banking industry strained for some time.

Even though the overwhelming majority of the banks that have gone under since the beginning of 2008 are smaller community banks, there have been two notable big bank failures.

Last year, the California-based mortgage lender IndyMac failed. That was followed by the collapse of savings and loan Washington Mutual, the largest bank failure in history. The FDIC seized WaMu and immediately sold its banking operations to JPMorgan Chase.

Several experts fear the potential for another large bank failure. While the U.S. government has repeatedly said it will not allow major institutions to fail, namely Citigroup  and Bank of America , some embattled regional banking giants may be too far gone to save.

“Conceivably, we’ll see some larger names fail as we go forward,” said Frank Barkocy, director of research with Mendon Capital Advisors, a money management firm that invests primarily in financial stocks.

Regulators have indicated they are gearing up for tougher times. In addition to requesting an increase in its borrowing authority from the Treasury, the FDIC has maintained that it expects its deposit insurance fund to suffer $40 billion in losses through 2013. Last summer’s collapse of IndyMac wiped out $8.9 billion from the fund.

Fearful of drawing down the fund any further, banking authorities may attempt to broker more assisted acquisitions like JPMorgan Chase’s purchase of Washington Mutual, where the purchaser acquires the deposits and a portion of the failed bank’s bad assets.

“The [FDIC's] incentive is not to have a bank failure at all,” said Jack Murphy, a long-time partner at the law firm Cleary Gottlieb Steen & Hamilton, who previously served as general counsel for the agency. “If it is possible to have a private market solution, that is ideal.”

Next week, regulators are expected to provide a better glimpse of the health of the banking sector, when the FDIC presents its quarterly banking profile for the fourth quarter of 2008.

One highlight of the report will be the agency’s so-called “problem bank” list. That number is expected to climb from 171, where it stood at the end of the third quarter.

Some have charged that the list is hardly reliable, given that only a fraction of the banks that are included ever actually reach the point of collapse.

Nevertheless, a big jump in the number of banks on the problem list could serve as an indicator that there will many more Friday failures to come this year.