DJN: =DJ Elgindy, Colorful And Contradictory, Has Checkered Past
(Dow Jones 05/22 16:01:59)
By Phyllis Plitch
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--When investors were taken in by the infamous PairGain
Technologies Web hoax back in 1999, Anthony Elgindy weighed in with a
warning on the perils of listening to Internet hype.
"Plenty of the people talking about stocks have hidden motives for what
they're saying," Elgindy said in an article about the scam, perpetuated by a
former employee who posted a bogus report that PairGain was about to be
acquired, sending shares soaring.
The previous year, when regulators suspended trading in shares of online
retail service Shopping.com amid allegations of market manipulation, Elgindy
waxed sympathetically about the "mom and pop investors who would lose a ton
of money over this."
The two incidents are just tiny specks in the contradictory, colorful and
controversial world of Elgindy, who now faces charges of manipulating stocks
via the Internet by allegedly using secret government information fed to him
by collaborators within the Federal Bureau of Investigation.
The 34-year-old short seller, whose real name is Amr Elgindy, has played a
kind of Robin Hood role in the markets, tipping off investors and
authorities about questionable activities of stock promoters and blasting
stocks he deems overhyped and overpriced. The fast-talking, super-charged
Elgindy also ran Pacific Equity Investigations, which he billed as a firm
engaged in monitoring stock hyping on the Internet.
Companies who were his target on the other hand, were not too keen on his
colorful commentaries and he's been the subject of legal action for his
views, well-circulated on the Web. But he often ended up being right.
Elgindy, who was once kicked off stock-discussion Web site Silicon Investor
for making abrasive comments came back with a vengeance, developing a
notable following on the discussion thread he leads. Elgindy - probably best
known online by his Internet handle, Anthony@Pacific - was also operating
two stock-touting -- or stock-beating -- Web sites, anthonypacific.com and
insidetruth.com when authorities caught up with him Wednesday.
At the same time, Elgindy, who lives outside San Diego, had admitted working
for so-called bucket-shop brokerages in the past. He was sanctioned in 1997
by the National Association of Securities Dealers, which suspended him for
30 days and fined him $30,000; the NASD said he used a system designed for
small retail orders to execute stock trades for his firm's own account.
More recently, in December, Elgindy was the subject of a second NASD
disciplinary action, after the market making firm he fronted - Key West
Securities Inc. - was found liable for making a series of high bids on a
stock without intending to honor them. He and the California-based firm were
also found liable for disseminating recommendations without disclosing that
Key West was a market maker.
Just two years ago, practically to the day, Elgindy was sentenced to four
months in prison and four months home confinement and fined $20,000 after
admitting that he accepted disability payments that he wasn't entitled to.
Elgindy pleaded guilty after being charged with receiving tens of thousands
of dollars in disability benefits at the same time he was working for two
brokerages in the mid-1990s. The government also alleged that he submitted a
falsified tax form that inflated his income in order to qualify for higher
disability benefits.
In typical Elgindy fashion, he was ready and willing to chat about the
sentence, mostly fretting that investors would discount his warnings about
stock scams because of the case. He said he was severely depressed at the
time the incident occurred, and that he had since tried to atone by bringing
fraud to the attention of regulators and testifying on behalf of
regulators.
"I feel bad that now my message isn't nearly as meaningful. That's the only
sad thing I feel," Elgindy told Dow Jones Newswires at the time. "The rest
- hey, I made a mistake a long time ago."
-Phyllis Plitch; Dow Jones Newswires; 201-938-2357;
phyllis.plitch@dowjones.com |
