Stanford Financial Blow-Up: What Will Happen to Investors' Money?

The bank is based outside of the U.S., which complicates the issue.

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Across the country--and even throughout other countries--investors of Stanford Financial Group are pounding on doors, demanding their money back.

According to this report, a SEC spokeswoman said it's too soon to tell if the CD investors will lose their funds--it may be a "somewhat timely" process--and that the commission has concerns that money may be lost. The story also says the SEC will have a web site up and running Wednesday to answer Stanford investors' questions.

Investors shouldn't get their hopes up just yet, though, according to one expert. The reason: Houston-based Stanford issued certificates of deposit through Stanford International Bank, which is based in Antigua.

Michael Gurland, co-chair of Neal Gerber Eisenberg’s White Collar Criminal, Regulatory & Internal Investigative Services Practice Group, says the fact that the bank is based outside of the U.S. complicates matters because offshore accounts make it more difficult for the SEC to enforce their regulations, according to Gurland.

Reuters is reporting that lawyers have not yet received documents determining whether investors are insured, and Stanford representatives are directing questions to the SEC. A class-action lawsuit has already been filed by a group of investors.

Updates to come.