In 1990, stock broker Ross H. Mandell was discharged by a Wall Street brokerage firm after customers' complaints of unauthorized trading, securities records show. In 1995 the New York Stock Exchange suspended him for six weeks, saying he mishandled customer accounts. In 2002, Ohio securities regulators alleged he wasn't of "good business repute," and said they intended to deny Mr. Mandell a license to sell securities. Mr. Mandell withdrew the application.

Yet Mr. Mandell was able to get back into the stock business. Now he is again embroiled in controversy, this time in both the U.S. and the United Kingdom -- raising questions about how regulators acted given his record.

In 2002, before Ohio regulators blocked him there, the National Association of Securities Dealers, which regulates brokerage firms, granted Mr. Mandell's firm an NASD membership allowing the U.S. unit of his Sky Capital Holdings Ltd. to trade. The company, which already was setting up offices in New York and London, also issued its own shares to the public through a small-company stock exchange in the U.K. owned by the London Stock Exchange.

Mr. Mandell rounded up a roster of big names to help. Former U.S. Sen. Larry Pressler of South Dakota joined his board of directors. Former Iraq envoy L. Paul Bremer and former New York police commissioner Howard Safir sat on the advisory board to Global Secure, a security firm owned by Mr. Mandell, an affiliate of Sky Capital Holdings and other investors.

Then earlier this month, the Federal Bureau of Investigation searched Sky Capital Holdings' New York office. That followed two separate grievances filed with the NASD in recent months against the company's U.S. unit, alleging that the brokerage mishandled customer funds, according to NASD records. One complaint alleges unauthorized trading. Together they allege $1.2 million in damages. Mr. Mandell disputes both.

After the FBI raid, trading in Sky Capital Holdings' stock was suspended; it had already collapsed from its offering price of 185 pence ($3.60) to just 16.5 pence (32 cents). It isn't clear what the FBI is investigating, but a person familiar with the probe says it involves, among other things, whether customer funds were diverted for the company's use. In September, Sky Capital Holdings reported a loss of some $13 million for the year that ended March 31, and this month the company said it has increased its borrowings to avoid a cash crunch.

The 49-year-old Mr. Mandell said he is cooperating with the FBI investigation. His law firm in London, Carter-Ruck, said in a letter the FBI has repeatedly confirmed he isn't a target of any investigation. A spokeswoman for the U.S. attorney's office for the Southern District of New York declined to comment.

In an interview, Mr. Mandell said records of customer complaints, the 1990 termination, and regulatory actions were wrong. For example, he said the record of the 1990 termination is actually a data-entry error and that he was permitted to resign. This week, Mr. Mandell's U.S. brokerage filed a complaint against the NASD with the Securities and Exchange Commission, alleging that the regulatory group had overstepped its authority in an "overzealous" campaign to investigate the U.S. unit. The complaint alleges the NASD is biased against Mr. Mandell. The NASD declined to comment.

Messrs. Pressler, Safir and Bremer all have stepped down from their posts as board members. Mr. Pressler, who joined Sky Capital Holdings' board in 2004, said recently that he believed at the time that Mr. Mandell deserved another chance after his past problems. "I do believe in second acts in American lives," he said. "I'm flabbergasted by this whole thing," Mr. Pressler said. Soon afterward he resigned after failing to win a board resolution for Mr. Mandell to stand down, according to Mr. Pressler and another person familiar with the meeting.

Mr. Bremer said he knew Mr. Mandell, whom he said he met once, had a regulatory problem "which had been resolved." Mr. Safir didn't return calls for comment. Alexander Duma, a London barrister and banker who was Sky Capital Holdings' chairman, has stepped down, too. Mr. Mandell entered the securities business in 1983 and worked with several firms in the 1980s and 1990s, according to an NYSE record. Customer complaints dogged him. In June 1991, for example, Ohio and NASD records say, clients alleged he churned their accounts -- generating fees with unnecessary trades -- and participated in unauthorized trades. An NASD panel two years later found Mr. Mandell and the firm he worked for at the time liable for $25,000, according to the records. Mr. Mandell called the account in the documents "incorrect."

In 1995, the New York Stock Exchange cited client allegations of unauthorized trading and suspended him for six weeks. Mr. Mandell consented without admitting or denying guilt, according to an NYSE filing. In a 1996 page-one story in The Wall Street Journal, Mr. Mandell said he wasn't guilty but that the action would have cost $200,000 to $250,000 to fight.

Then in 1997, two clients alleged Mr. Mandell engaged in unauthorized trading, among other improprieties. Mr. Mandell settled for $75,000 in 1999, according to Ohio records. He didn't admit or deny guilt in the complaint, and said the settlement was a fraction of the alleged financial damages.

By 2001, Mr. Mandell was working on the formation of Sky Capital Holdings, applying to the SEC to become a registered broker and to the NASD to become a member firm, according to company statements. The SEC granted a broker-dealer application in 2001 to Sky Capital Holdings' U.S. business. The NASD initially denied Sky's membership application but eventually allowed it after Mr. Mandell agreed that he couldn't hold a supervisory position, among other restrictions, according to a Sky Capital Holdings prospectus filed in the U.K. The restrictions were later lifted. The SEC and NASD declined to comment.

A spokesman for the Alternative Investment Market, which listed Sky Capital Holdings' shares, said AIM's parent, the LSE, regulates the overall market. But firms called nominated advisers, or nomads, assess candidates for listing. The nomad for Sky Capital Holdings, Grant Thornton, said it had conducted extensive due diligence and weighed the fact that the firm was NASD regulated. The company resigned as the adviser Nov. 17 after a series of developments, including the FBI search, it said.

NASD records for Sky Capital LLC, the company's U.S. retail brokerage, show the two recent large customer complaints, both pending. One, filed by Barry Whitehead of Bristol, England, alleges damages of $940,388. Mr. Whitehead alleges Mr. Mandell and two brokers misrepresented investments, churned his accounts and traded without his authorization.

Mr. Mandell called both complaints scurrilous and said he wasn't involved with the accounts, according to the records.