(Reuters) - A fund of hedge funds run by two members of U.S. Vice President Joe Biden’s family was marketed exclusively by firms controlled by Texas financier Allen Stanford, charged by regulators with an $8 billion (5.5 billion pound) fraud, the Wall Street Journal said.
The $50 million fund was jointly branded between the Bidens’ Paradigm Global Advisors and a Stanford Financial Group entity, and was known as the Paradigm Stanford Capital Management Core Alternative Fund, the paper said.
Stanford-related companies marketed the fund to investors and also invested about $2.7 million of their own money in the fund, the paper said, citing a lawyer for Paradigm.
Paradigm Global Advisors is owned through a holding company by the vice president’s son, Hunter, and Joe Biden’s brother, James, according to the paper.
Paradigm’s attorney, Marc LoPresti, who represents Hunter Biden and James Biden, as well as Paradigm, told the paper he did not know which Stanford entity invested the roughly $2.7 million.
He told the paper the Bidens never met or communicated with Stanford.
Joe Biden’s office and the U.S. Securities and Exchange Commission (SEC) could not be immediately reached for comment by Reuters.
The paper cited LoPresti as saying the fund offered to turn over the $2.7 million investment it received from Stanford’s firm in 2007 to a court-appointed receiver in the SEC’s civil fraud case involving Stanford.
Stanford was charged by the SEC last week with fraudulently selling $8 billion in certificates of deposit with improbably high interest rates from his Stanford International Bank Ltd (SIB), headquartered in Antigua.
Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga