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WASHINGTON -- The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a Ponzi scheme, according to the SEC inspector general.

The inspector general says an SEC enforcement official who helped quash investigations of Stanford's business later represented the Texas billionaire investor.

The SEC didn't bring charges against Stanford, alleging a $7 billion fraud, until February 2009. The SEC inspector general also says in a report released Friday that institutional influence in the enforcement division was a factor in the agency's repeated decisions not to conduct a full investigation.

Complex cases like Stanford's that couldn't be quickly resolved were discouraged by enforcement higher-ups, the IG's report says.

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