A federal grand jury today indicted executives and brokers from Six Sky Capital on charges related to an alleged $140 million stock fraud.
Just between us, there’s something reassuring about this. Maybe we’re reassured because its a normal type of financial crime, instead of a crisis. Or maybe it’s just because the fraud’s amount begins with an M instead of a B.
The six men accused include Ross Mandell, chief executive officer and founder of Sky Capital. They are accused of manipulating shares in two Sky Capital companies traded on the Alternative Investment Market of the London Stock Exchange.
The Sky guys were allegedly running a boiler-room operation out of Sky Capital’s offices in lower Manhattan. They allegedly used two broker dealers, Thornwater Co. LP and Sky Capital LLC, to pressure investors into buying shares and then restricting them from selling them. Apparently there was some kind of “no net sale” rule that prevented investors from withdrawing funds.
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