NASD bars online stock short-seller for fraud
NEW YORK, May 19 (Reuters) - A U.S. market regulators on
Monday said it barred for life online stock short-seller Amr
"Tony" Elgindy and expelled his firm from the securities
industry for an alleged scheme to manipulate the price of Saf T
Lok Inc. .
Elgindy could not be reached for comment.
Elgindy and his firm, Key West Securities, in 1997 inflated
the stock price of handgun safety device manufacturer Saf T Lok
by entering fraudulent quotations in the Nasdaq system and then
sold the stock short at the artificially high prices, the
National Association of Securities Dealers' National
Adjudicatory Council charged in a statement.
The charges come on top of the arrest last May of Elgindy,
two associates and two FBI agents on charges of racketeering
and securities fraud.
Elgindy and Key West, who were jointly fined $51,000 on
Monday, then sent out negative research on the company, pushing
down Saf T Lok shares. Elgindy is barred for life from the
industry while Key West is permanently expelled from the
brokerage business.
Following the May arrests, one of the FBI agents admitted
to most of the accusations against him, including allegations
that he dug up information about companies in regulatory or
criminal trouble in FBI databases and passed it on to Elgindy.
Last year, Elgindy owned and operated Pacific Equity
Investigations, as well as www.InsideTruth.com, a public
investment Web site, and www.AnthonyPacific.com, a subscription
e-mail newsletter and subscription-based investment Web site.
Elgindy encouraged his Web site subscribers to short stocks
as well, thus pushing down share prices so he and the others
could maximize short-selling profits.
An investor makes money from short-selling by borrowing a
stock and selling it at a higher price and then repurchasing it
at a lower price.
((Reporting by Chris Sanders, editing by Gerald E. McCormick;
chris.sanders@reuters.com; Reuters Messaging:
chris.sanders.reuters.com@reuters.net; 646 223-6343))
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