CBS' Harry Smith spoke with a Mark Tidwell, a former vice president at Stanford Financial, who is suing the company for wrongful termination.
Tidwell said he was first alerted to possible wrongdoing in May 2005, and summer of 2006. "They told us everything was fine," Tidwell said of the Stanford executives. "They said it was just part of a routine inquiry."
Smith also spoke with Kelly DeHay, an investor who had some 15% of his portfolio invested with Stanford, and Rod Danielson, who had 20% of his portfolio invested with the company.
Danielson first invested in the company's CDs in mid-2006. They told him that while the CDs weren't regulated by the US government, "they had higher reserve margins than US banks," and provided other assurances.
"Everything seemed reasonable," DeHay agreed.
When both investors tried to withdraw their funds after news broke of the SEC investigation into Stanford and his companies, they were told their accounts had been frozen for two months
"We thought these CDs were the safest thing in our portfolio," Danielson said, noting that other investments, like mutual funds and stocks were declining at such a rapid pace.
"It's a little horrifying," DeHay said of the experience.
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