Not nice to lose your hard earn investment to fraud, theft, manipulation, breach of contract or nationalization...

CARACAS (Reuters) - Hundreds of Venezuelans on Wednesday sought to withdraw their investments at local offices of Stanford International after U.S. authorities charged the company with "massive fraud."

It was the second day that long lines formed at offices in Venezuela, people with investments at the company said. Venezuelans have an estimated $2.5 billion invested in Stanford International, Venezuela's banking regulator said.

Texas billionaire Allen Stanford who was charged with "massive fraud" on Tuesday related to the Stanford International bank as well as his Houston-based broker-dealer and investment units.

Against the backdrop of worried Venezuelan investors at Stanford International, local officials sought to calm clients of a Venezuelan sister company, whose assets are not linked to the business that is the target of the fraud charges.

Venezuela's banking regulator said Stanford Bank Venezuela -- one of the smallest retail banks in the country -- has healthy finances.

The vote of confidence from the banking regulator came a day after Stanford Bank Venezuela also issued a statement to say its assets were not linked to Stanford International. It requested a national banking authority representative sit on its board in what it said would be a show of transparency to its clients.

"With the situation that Stanford International is going through, anybody could think that Stanford Bank Venezuela could have some sort of problem," Edgar Hernandez Behrens, the head of Venezuela's banking regulator, Sudeban, said.

"But we at Sudeban have a prime function of supervising and inspecting all institutions and we can say in good faith that Stanford Bank Venezuela is a healthy bank without any type of problem to announce," he added.

At a main branch of the retail bank in Caracas, there were no long lines.

The U.S. Securities and Exchange Commission accused Allen Stanford of fraudulently selling $8 billion in high-yield certificates of deposits in a scheme that stretched around the world.

LATIN AMERICAN IMPACT

The U.S. fraud charges had an impact on operations linked to Stanford in Latin America.

In Colombia, the local arm of the Stanford Financial Group has halted its activities on Colombia's stock exchange with the permission of authorities, the Colombian Financial Superintendency said in a statement on Wednesday.

In Panama, bank regulators said on Tuesday they had taken over the local affiliate of Stanford Financial Group.

Stanford International has grown rapidly in recent years, in part with funds from Latin American countries.

The Stanford Group operates affiliated banks, brokerages and other companies in countries that include Colombia, Mexico and Venezuela.

Venezuelan business was an early motor of growth for Stanford International, although investments from the OPEC nation into the bank have dropped off in recent years, a Venezuelan industry official familiar with some of the group's operations said.

Local officials were not immediately available to confirm how much Venezuelan money was invested in securities issued by Stanford's Antigua-based bank.

(Additional reporting by Brian Ellsworth, Writing by Saul Hudson; Editing by Maureen Bavdek)