Sky Capital faces $140m fraud charges

Six former executives and brokers of Sky Capital, a New York brokerage, have been charged with a $140m transatlantic “boiler-room” fraud that law enforcers say reeled in UK and US investors, the FT said. According to a criminal indictment the individuals, including Sky’s “bad boy” founder and chief executive Ross Mandell, allegedly persuaded investors to buy shares through private placements in two related companies, Sky Capital Holdings and Sky Capital Enterprises, which traded on the LSE’s AIM. The indictment alleges the men used the funds to enrich themselves and to pay commissions to brokers, often disguised as loans or bonuses.

http://ftalphaville.ft.com/blog/2009/07/09/61096/sky-capital-staff-face-140m-fraud-charges/