SEC Worker Says She Got Demoted For Spying Stanford Plot

Law360, New York (May 13, 2011, 6:00 PM EDT) -- A U.S. Securities and Exchange Commission employee told a House committee Friday that she first spotted Robert Allen Stanford's alleged Ponzi scheme in 1997 but that her superiors repeatedly brushed aside attempts to investigate and eventually demoted her for complaining.

In prepared testimony, Julie Preuitt, a longtime employee in the SEC's Fort Worth, Texas, office, told the House Financial Services Committee that Stanford's operation was rife with red flags, but that Spencer Barasch, the branch's former director of enforcement, and others ignored her warnings.

SEC Inspector...
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