|
In 2010, on behalf of certain residents of the United Kingdom, Nicholas J. Guiliano, Esquire, of the Guiliano Law Firm, P.C., in Philadelphia, Pennsylvania sued several individuals, including Sky Capital, Granta Capital Group, Michael R. Passaro, Ross H. Mandell, and Stephen W. Shea for violation of the United States federal securities laws, and the securities laws of the United Kingdom, the sale of unsuitable securities, churning unauthorized trading, common law fraud, the failure to supervise, and breach of fiduciary duty in connection with their operation of a securities boiler-room at 110 Wall Street, 8th Floor, New York, New York.
In August 2010, an Arbitration Award was entered unanimously by the Panel granting the defrauded investors compensatory damages totaling $734,590 together with certain interest. ($367,295, with interest at the rate of 9% per annum from July 9, 2010 until the award is paid; $217,295, together with interest at the rate of 9% per annum from July 9, 2010 until the award is paid; $150,000, together with interest at the rate of 9% per annum from August 11, 2004.
Mandell was alleged and was ultimately found guilty of running an eight-year scheme to defraud mostly foreign investors of some $140 million, which used at strip clubs, where he spent on average $30,000 to $50,000 per visit, and to buy Swiss watches, charter private jets, and purchase the penthouse condo next to the United Nations.
The Individuals, Mandell, Shea, and Passaro were indicted on multiple counts of securities fraud, and conspiracy to commit securities fraud, mail fraud, and wire fraud in connection with the sale of the securities of Sky Capital Holdings, L.L.C. and Global Secure Holdings, Ltd. and were charged by the United States Securities and Exchange Commission with violation of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act for fraud in connection with the sale of the securities.
In September 2010, Ross H. Mandell, who is also the creator of the reality series staring himself, "Facing Life, Uncut, Uncensored, and Under Arrest," sought to vacate the arbitration award for among other reasons, including that the arbitration panel failed to grant a stay of the arbitration pending the adjudication of the criminal proceedings against him, and that the FINRA Panel engaged in misconduct for holding him responsible as a control person of the "boiler room," which substantially preyed on the citizens of the United Kingdom.
Today, however, United States District Court Judge for the Southern District of New York, Richard J. Sullivan, U.S.D.J., in a well reasoned opinion failed to vacate the arbitration award and instead affirmed the award as a Judgment against all parties, including Mandell, and also entered judgment in favor of the defrauded customers, together with the award of attorney’s fees against Sky Capital, Granta Capital Group, Michael R. Passaro, and Stephen W. Shea.
In August 2011, a federal jury in New York convicted Mandell of running an eight-year scheme to defraud investors of some $140 million. He used the money for such niceties as visits to strip clubs, expensive Swiss watches, and private jets.
The specific crimes proven by the government were astonishing. Like they were living out the C-movie knockoff of "Wall Street: Money Never Sleeps" Mandell and his team of merry men were shown to have spent $162,400 in investor money at places like Stringfellow’s strip club in London, for "adult entertainment."
Several of the brokers working for Mandell had histories of customer complaints, regulatory run-ins and and lost arbitrations. One employee, had even been previously busted twice for cocaine possession, burglary and receiving stolen property. It was a like a halfway house for wayward Wall Street.
One of Mandell’s purportedly closest advisors at Sky Capital was the former U.S. Senator Larry L. Pressler. Mandell also had others on his boards and as advisors at firms he owned and controlled: Former House Majority leader Richard K. Armey, L. Paul Bremer, Matthew Carrington, a former member of British Parliament, former New York City Police Chief Howard Safir, and Ex-CIA director Stansfield Turner.
Mandell and his employees also made a $49,000 donation to the Leadership PAC 2004, a political action committee associated with Rep. Michael Oxley (R-Ohio), a purported proponent of securities regulation, having co-sponsored of the Sarbanes-Oxley Act.
Mandell and Sky also donated $35,000 to crusading New York District Attorney Eliot Spitzer.
Although Mandell has yet to be sentenced according to federal prosecutors he scored "an offense Level of 48" on the Federal Sentencing Guidelines. A Level 48 is a life sentence.
Nicholas J. Guiliano, Esquire, The Guiliano Law Firm, P.C.
Our practice is limited to the representation of investors in claims, for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
|
