Let’s review: Sky Capital’s Ross Mandell was a former cocaine addict and an alcoholic. He had had five “regulatory events” filed against him by the New York Stock Exchange and securities authorities, one of which resulted in him being suspended from securities dealings for six weeks. The Feds raided his office in 2006, and he actually referred to himself as the “bad boy of Wall Street” in a New York Sun article. Also, he worked with Don King and had a home in Boca Raton, Florida (two flags that, while they may not be exactly red, are at least sort of fuchsia). So why were so many investors (“well-informed, sophisticated” investors, as one of the defendant’s lawyers said in court, “not grandmas in Omaha”) willing to put up up the cash to fund his $140 million fraud?
We guess he just seemed like he had principles.
Mr Mandell personally lied to AIM investors, including two Manchester-based investors who had bought $1m of Sky Capital shares. He persuaded them not to cash out, telling them he was about to sell the company to a German bank at twice the current share price. That was a fiction, it is alleged, and he later told the investors the deal collapsed because the German bank had wanted him to work for it for three years — something he could not do “because I’m Jewish.”
Wow, these sophisticated money guys have softer hearts than we thought. Did they also believe it when he told them he couldn’t return their money because he gave it all to the Human Fund?
Sky Capital chief called himself ‘bad boy of Wall St’ [FT]
FBI CRASHES THE BOILER-ROOM PARTY [NYP]
3rd UPDATE:Sky Capital Founder,5 Others Charged In $140 Million Fraud [Lloyds]
