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Stanford CFO Cooperating in Probe of Former Boss

Chief Financial Officer for Texas financier Allen Stanford has changed course, and is now cooperating in the civil and criminal investigations of his former boss, CNBC has confirmed.

Last month, Stanford CFO James Davis had asserted his Fifth Amendment rights against self-incrimination in the case, refusing to testify or provide documents.

But since then, Davis has hired a new attorney, former federal prosecutor David Finn in Dallas. Finn tells CNBC that Davis is now "fully cooperating" with both the civil investigation by the Fort Worth office of the Securities and Exchange Commission, as well as a criminal investigation being conducted by the Justice Department in Washington.

The SEC last month accused Stanford and his firm—as well as Davis and others—of running a massive international fraud involving the sale of high-yielding certificates of deposit. In contrast to Davis, Stanford is still taking the Fifth, and thus far has not retained a defense attorney—a fact that Finn describes as "puzzling." Finn says Davis has "a heavy heart" over the investor losses in the alleged $8 billion fraud.

So far, the only person charged criminally in the case is Stanford's Chief Investment Officer, Laura Pendergest-Holt, who is charged in a criminal complaint with obstructing the SEC's investigation of Stanford. Prosecutors this week got a 30-day extension on their deadline to secure an indictment against Pendergest-Holt. The new deadline is April 28.