Internet Securities Bust:
Gerald Milligan and Andrew Mariani, of Wellington, Fla., were jointly charged by the FBI, a Florida district attorney and others, with conspiracy to commit wire fraud. Milligan ran an investment website through a company called Options Management Specialists (OMSI). OMSI received $1.1 million from approximately 100 investors between 2005 and 2007, of which Milligan spent nearly $1 million to support his luxe lifestyle, pay Mariani and pay off original investors. Mariani apparently lost the majority of the $150,000 in investor funds with which he attempted to trade. Milligan perpetuated the scheme by taking on a variety of aliases, and sending emails to investors assuring them that their investments were doing fine. Milligan and Mariani face a maximum of five years in jail, a $250,000 fine, three years of supervision and restitution of the lost funds.
The Difference A Day Makes:
Matthew Sample and David Cross, two former UBS brokers who founded Sample & Cross Capital Management, are facing fraud claims from investors. The two men ran the Vega Opportunity Fund, a hedge fund that lost nearly $100 million — in one day — from failed options trades, according to a statement made by plaintiff attorney Andrew Stoltman. The arbitration complaint, filed in late October with the American Arbitration Association, said Sample & Cross marketed the fund's strategy as seeking capital preservation.
