MANHATTAN (CN) - A broker-dealer's former chief operating officer, who helped run a $140 million boiler room scheme and manipulate stock prices, pleaded guilty to conspiracy and securities fraud, federal prosecutors said. Shea used investors' money to dole out excessive commissions and rewarded employees for manipulating stock prices.
Shea, 38, of Brooklyn, is one of six defendants charged in scam allegedly run by Sky Capital and The Thornwater Company between 1998 and 2006.
The alleged mastermind, Sky Capital founder Ross Mandell, pleaded not guilty in 2009 and was released on a $5 million bond.
Shea and others in Sky Capital persuaded investors to invest in private placements and used their money to make Ponzi payments and pay brokers' commissions, the SEC said.
Shea and his cohorts are accused of raising more than $61 million between 2002 and 2006, but restricting investors from selling the stock, which became virtually worthless when it was banned from trading on the London stock exchange.
Shea faces a maximum of 5 years in prison for conspiracy, 20 years for securities fraud, and stiff fines, including up to $5 million for securities fraud.
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