Former Sentinel trader pleads guilty to fraud charges

Tue Oct 8, 2013 5:47pm EDT
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By Nate Raymond

(Reuters) - A former executive at Sentinel Management Group Inc pleaded guilty on Tuesday to defrauding customers out of more than $500 million before the futures brokerage collapsed in 2007.

Charles Mosley, a former Sentinel senior vice president and head trader and who faced 20 criminal counts in the initial indictment, pleaded guilty to just two before a federal judge in Chicago under a new charging document prosecutors filed Friday.

Mosley and Sentinel's former chief executive officer, Eric Bloom, were indicted last year on charges they used customer securities as collateral for a bank loan to fund a "house" trading portfolio intended to benefit them and Bloom's family.

Under a plea deal, prosecutors have agreed to recommend a prison term of 10 years. Mosley, 49, has meanwhile agreed to cooperate with the investigation.

Charges remain pending against Bloom, who faces trial starting February 24.

Mosley's guilty plea was confirmed by a spokesman for Acting U.S. Attorney Gary Shapiro in Chicago.

A lawyer for Mosley did not immediately respond to a request for comment, while a lawyer for Bloom had no immediate comment.

Before it collapsed, Northbrook, Illinois-based Sentinel mainly managed money for other futures brokerages who sought out the high-yield returns Sentinel offered.   Continued...