MIAMI, (Reuters) – Antigua and Barbuda’s government  yesterday dismissed the country’s chief financial regulator  over his alleged role in the Allen Stanford fraud case, and  vowed to root out further corruption “cancer” if it existed. Leroy King had already been suspended last week as head of  the Caribbean nation’s Financial Services Regulatory Commission  (FSRC) over U.S. charges that he collaborated with Texas  billionaire Stanford in a $7 billion “massive Ponzi scheme”.

In announcing the Antigua and Barbuda cabinet’s decision,  Attorney General Justin Simon told Reuters he had received from  U.S. authorities a request that King be detained pending a  formal extradition process. This request for his arrest would  be considered by the local judicial authorities, he said.

“Cabinet … has agreed to accept the (FSRC) recommendation  that Mr. King’s employment as administrator be terminated with  immediate effect,” Simon said in an interview by telephone from  the Antiguan capital St. John’s.

Antigua and Barbuda was at the heart of Stanford’s business  empire stretching from the Caribbean to the United States,  Latin America and Europe. Antigua’s biggest bank, Stanford  International Bank Ltd. (SIB), sold the certificates of deposit  (CDs) the U.S. Securities and Exchange Commission (SEC) says  bilked thousands of investors out of billions of dollars.

Stanford’s detention hearing in Houston is set for this  morning.

The scandal surrounding Stanford, a flamboyant sports  entrepreneur who was known as “Sir Allen” in Antigua after he  was granted a knighthood by the government, had damaged the  nation’s image as an offshore finance destination, Simon said.

“The (SEC) report clearly is adverse … and the effect  clearly is not something of which we can be proud,” he said.

On Friday, the amended SEC charges against Stanford, four  associates and King alleged that the Antigua regulator received  “thousands of dollars in bribes” from Stanford to ensure the  FSRC “looked the other way” and conducted sham audits. The SEC said King, acting as gamekeeper turned poacher,  helped Stanford and his associates evade and obstruct U.S.  probes into the Stanford business empire for several years.

Simon said the Antigua FSRC, now under new leadership,  would “widen the scope of the investigation to include other  offshore companies during the tenure of Mr. King”.

This was “to ensure that the cancer which has been  discovered has not spread, that it is limited to the Stanford  situation,” he said.

The board of the Antigua financial regulatory authority,  Simon said, was now being chaired by Althea Crick.

She had in the past led the country’s financial watchdog  “until Mr. Stanford may have influenced her removal,” the  attorney general said, acknowledging the power which the Texas  billionaire had wielded over the country’s financial sector. Simon said while it seemed clear that King had concealed  key correspondence with the SEC from his colleagues in the  Antigua regulator, it was too early to say whether King, or any  other local citizens, could face criminal charges in Antigua.