Venezuela tells Stanford investors they are on their own

Reuters:

Venezuela is unlikely to help investors faced with the loss of billions of dollars deposited at the discredited Stanford International Bank, Finance Minister Ali Rodriguez said on Wednesday.

The OPEC nation's bank regulators say Venezuelans may have invested up to $2.5 billion in high-yield certificates of deposit at the Antigua-based unit of a global financial network owned by Texan billionaire Allen Stanford.

U.S. authorities have accused Stanford of carrying out a "massive fraud" by lying to investors.

Venezuela last week took over Stanford Bank Venezuela after a run on deposits sparked by the fraud charges weakened the otherwise healthy bank. Stanford Bank Venezuela is owned by Allen Stanford, but its accounts are not linked to the discredited offshore unit.

Finance Minister Rodriguez said Venezuela did not have a responsibility to protect investments made overseas.

"We respond to those savers who put their money in a bank that is regulated by Venezuelan laws," said Rodriguez during a televised interview.

"It would be difficult for us to take responsibility for investments that were made in banks that are regulated by other laws and policies," he said.

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I find the statement of the finance minister not too credible. It is difficult to believe that a control freak like Hugo Chavez that nationalizes companies out pique, would not regulate every foreign company in the country. I don't believe he would permit a foreign institution accepting deposits from Venezuelan citizens to not be regulated. The Bank would have to submit to the jurisdiction to be allowed to operate.