Six former executives at Sky Capital have been indicted by a federal grand jury on a $140 million stock fraud case, according to Bloomberg. The former Sky Cap employees are accused of manipulating shares in order to convince investors as to the attractiveness of the stock.
Prosecutors allege that the former Sky Cap execs pressured its brokers to lie and deceive investors as to the potential of two companies owned by Sky Cap, both traded over London’s Alternative Investment Market exchange.
Sky Cap allegedly implemented a “no net sales” policy that prevented investors from selling their stock; the London Stock Exchange suspended trading of these stocks in 2006, making investors’ shares worthless.
Indicted in the case is former Sky Cap CEO Ross Mandell and other former executives Stephen Shea, Adam Harrington, Robert Grabowski, Michael Passaro, and Arn Wilson.