SEC Charges SkyWay Stock Promoter

SEC Charges SkyWay Stock Promoter

Posted September 09, 2010 4:27PM PST

The Securities and Exchange Commission is charging Kenneth Bruce Baker with acting as a broker-dealer and promoting the purchase of shares of SkyWay Communications Holdings Corp., a penny stock company, without being registered with the commission.
Baker, whose last known residence was in Cape Coral, Fla., served as a consultant to Clearwater, Fla.-based SkyWay from 2003 to 2005.
According to the SEC, he was responsible for locating a public shell for the company's reverse merger, locating investors in exchange for commissions and communicating with brokers, dealers and others on behalf of SkyWay.
SkyWay paid Baker a total of $1.9 million, including $315,000 in cash and the rest in stock that was registered on Form S-8. Form S-8 is intended to be used to register stock that is issued under employee benefit or incentive plans. The Form S-8 registration statement is immediately effective when it is filed with the SEC, unlike other registration statements, without a review by SEC staff. It is against SEC rules, however, to use Form S-8 stock as compensation for raising capital.
SkyWay chief executive James Kent allegedly concealed from investors that Baker was to be paid in S-8 stock by signing a bogus agreement in July 2003 stating that Baker would not be paid for promoting SkyWay or for raising money for the company.
Baker is now facing a public hearing where he will be able to answer the charges.

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