Im not sure what BOB is babbling about, but check the ABC website for more info:
ABC SPOTLIGHT ARCHIVE ABC NEWS - 20/20
BRIAN ROSS REPORTS ON WALL STREET OF THE 1990S, WHERE STOCK SWINDLERS AND ORGANIZED CRIME FIGURES HAVE MOVED INTO THE FINANCIAL MARKETS, IN REPORT AIRING FRIDAY MAY 2,1997 AT 10/9 PM
<Picture: Photograph of Brian Ross>
1997 c ABC MICELOTA
Tony Elgindy is a 29-year-old stockbroker who drives a Ferrari, makes and loses millions of dollars and doesn't go anywhere without his gun. Since cooperating with the FBI and federal prosecutors investigating a new wave of crime on Wall Street, Elgindy has armed himself and has followed elaborate security measures. In an ABC News "20/20" investigation, Brian Ross reports on Wall Street of the 1990s, where brokers receive threats and even beatings as stock swindlers and organized crime figures move into America's financial markets and target small investors as their victims. Mr. Ross' report airs on ABC News "20/20," FRIDAY, MAY 2 (10:00-11:00 p.m., ET), on the ABC Television Network.
As Mr. Ross reports, scores of stockbrokers around the country are under investigation or indicted on corruption charges, entire brokerage firms allegedly infiltrated by mobsters to push worthless stocks. Most of the problems have occurred with stocks connected to what is known as NASDAQ, which specializes in small, start-up companies. Among its success stories are Microsoft and MCI.
However, the same lenient rules that have allowed legitimate start-up companies to sell stock have also made it easy for con men and the mob to do the same thing. At the beginning of the scam, crooks find obscure or failing companies and buy up the stock cheaply. Then, using corrupt brokers, high-pressure telephone sales and misleading press releases, they create a buying frenzy. As small investors get sucked in, it drives up the price of the stock.
Federal law enforcement authorities say that was the case with a company in which George Fernham and members of his family invested. A broker persuaded the Dallas businessman to invest thousands in a start-up company called Alco International, which was listed and traded on the NASDAQ Small Cap market. The company was promoting a breakthrough medical device that would help protect surgeons from AIDS.
"They said it was a slam dunk, a sure thing," Mr. Fernham says. "Twice a week, we would get literature in the mail, showing how much they sold and how much money they were going to make off it and how the stock market was just going to go through the ceiling." Mr. Fernham and two members of his family, along with thousands of other Alco International investors, didn't know that the elaborately produced brochures were full of half-truths and outright lies. They also didn't know that Melvin Richards, a convicted con man supposedly banned from dealing in stocks, was operating behind the scenes at Alco.
Federal authorities say that Richards and his associates were able to run Alco International's stock price up by paying huge bribes to stockbrokers who would then push the stock to their customers. It happened at the brokerage house where Tony Elgindy worked. "Undeniably, they were being bribed," Mr. Elgindy says of his fellow brokers. "I was able to determine that on any given month, on any given payday . . . what was it -- between $100,000 to $200,000 to $300,000 in cash going out per office."
As an executive at a brokerage firm at the center of the Alco scandal, Elgindy provided information to federal investigators which revealed how the bribe scheme worked. Instead of recommending a reliable stock, brokers received extra payments to recommend Alco International.
With Alco International's losses mounting, brokers continued to pitch the stock. The last contact Mr. Fernham says he had with his broker was when he tried to sell as the price was collapsing. His family -- and hundreds of other Alco investors -- lost thousands of dollars.
Along with all the bribes and corruption on Wall Street have also come threats and violence. According to the executive of one Wall Street firm, a broker who made the mistake of trading in a stock the mob was trying to control -- undercutting their efforts to drive the price up -- was roughed up and threatened at the firm's office. The firm backed off from the stock.
Tony Elgindy's information on the Alco case helped convict Melvin Richards and four others on tax evasion charges. Mr. Richards, who is awaiting sentencing next month, says that he has done nothing wrong.
Despite receiving threats, including a "messenger" who described acts of violence against other brokers, Mr. Elgindy refuses to be intimidated. "I'm not getting out," he says. "I'm not going anywhere. We're here to stay."
Also on "20/20," Hugh Downs interviews the Reverend Billy Graham, whose amazing career has spanned more than five decades and the administrations of ten U.S. Presidents. The 78-year-old evangelist reflects on his life and discusses his views on politics and contemporary issues such as abortion and homosexuality.
And Arnold Diaz reports on a disturbing trend among sun-bathers: Newly marketed lotions which offer little or no protection against exposure to the sun.
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Hugh Downs and Barbara Walters co-anchor ABC News "20/20." Victor Neufeld is executive producer. David Page was the producer of Brian Ross' investigation on the stock market. |
