Sky Capital Gets Busted for Fraud | SEC Takes it to Court
Sky Capital fraud case flies into Federal Court
Every once in a while, I think that perhaps I should invest in the stock market. People make a lot of money doing that, or so I’ve heard. I always shy away from going through with it, though, because I feel like I don’t know what I’m doing.
Today is one of those days when I’m glad I haven’t tried to participate in something I don’t fully understand. I could have been one of the Sky Capital investors who got bilked out of all their money. Check out this tidbit from Courthouse News Service:
Sky Capital and the six men who run it sold millions of dollars of securities in a fraudulent boiler scheme to investors who were restricted from selling the stock, which became worthless, the Securities Exchange Commission claims in Federal Court.
Beware aggressive salespeople
Any investors who were counting on being able to sell their stock and use the money might have to turn to paycheck loans instead. This is another example of why sometimes people shouldn’t trust fast-talking salespeople. If a person tries to sell you something and seems to be withholding information, use your money somewhere else.
The SEC claims the firm’s founder, president and CEO Ross Mandell, of Boca Raton, Fla., directed Sky Capital brokers to make material misrepresentations and omissions and use high-pressure sales tactics to push stock in two related companies – Sky Capital Holdings Ltd. and Sky Capital Enterprises, says Courthouse News Service.
Give me the names
Courthouse News Service also printed the names of each person named in the Federal Court case:
Also charged are COO Stephen Shea of Brooklyn, and four former registered representatives: Robert Grabowski of Staten Island, Adam Harrington Ruckdeschel of New York City, Michael Passaro of Boca Raton, and Arn Wilson of Dix Hills, N.Y.
The SEC seeks disgorgement, penalties and injunctions.
Who can we trust?
It’s tough nowadays to distinguish a good idea from a bad scam. Con artists have come out of the woodwork as the economy has deteriorated. Scammers promise help getting out of debt or lower mortgage payments, charge fees upfront at then make off with the cash.
There isn’t one good answer for how to avoid scams. A few simple tips, though:
- If it seems too good to be true, it probably is.
- If you’re unsure about a financial decision, don’t give in to pressure.
- Be wary of financial services that charge fees up front. Most debt consolidators don’t charge you until they have already completed their jobs, and likewise with mortgage adjusters.
Scary stock market
The only tip that would have helped those who were defrauded by Sky Capital is not to give in to pressure. If a business people or sales people really have great, legitimate deals, they won’t feel the need to pressure you into buying from them. After all, if they’ve got a great thing going, they should be able to find lots of buyers, right?
It’s a sad fact that humans will lie, cheat and steal for money, but it’s true. Be careful with your money.