Allen Stanford, the billionaire cricket impresario, has been charged with a “massive ongoing fraud” worth up to $8 billion by the American financial authorities.

Federal agents stormed into the office of the Stanford Financial Group in Houston, Texas, this morning after the Securities and Exchange Commission (SEC) accused Mr Stanford of major fraud in the sale of billions of dollars of financial derivatives.

The SEC - the Wall Street watchdog - filed charges at the Federal District Court in Dallas this morning claiming that Mr Stanford and two colleagues had misrepresented the safety and liquidity of investments in their Antigua-based Stanford International Bank Ltd (SIB), which has about 30,000 clients.

Mr Stanford, who built his own cricket stadium on his adopted home of Antigua, staged a $1 million-a-man cricket tournament featuring the England team last autumn. The Twenty20 tournament was criticised for poor playing conditions, while Mr Stanford was thought to have upset many of the losing England players by seemingly flirting with their wives and girlfriends on the sidelines.

The England and Wales Cricket Board (ECB) responded to the accusations in the US by immediately calling off talks over future events with Mr Stanford.

An ECB statement read: “Following allegations made today by the US Securities and Exchange Commission and their decision to apply for a temporary restraining order which was filed in a Dallas /Fort Worth court, the England and Wales Cricket Board and the West Indies Cricket Board have suspended negotiations with Allen Stanford and his financial corporation concerning a new sponsorship deal.”

Stanford Financial Group is now “under the management of a receiver,” according to a sign taped today to the window of the firm’s Houston headquarters, an eyewitness told news agencies.

“We are temporarily closed. The company is still in operation but under the management of a receiver.”

The main product of Mr Stanford's massively successful bank is a certificate of deposit (CD) – a fixed-term investment, usually over three months, six months or for between one and five years – on which a fixed rate of interest is paid.

Watchdogs were thought to be puzzled as to why SIB had continued to pay out above-average rates to customers for so long.

BusinessWeek reported that SIB’s CDs, which require a minimum investment of $50,000, offer a rate of 4.5 per cent on a one-year deposit – compared with an average of just 2 per cent at American banks. It says that a year ago, Mr Stanford was selling five-year CDs offering a yield of 7.03 per cent, while the industry average was just over half that level.

The SEC’s outgoing enforcement chief Linda Chatman Thomsen alleged today that Mr Stanford and his family and friends “perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors".