This is the article.
I wonder if it's the proverbial "tip of the iceberg"
news.ft.com
=StoryFT&cid=1021990930498&p=1012571727102
Published: May 22 2002 19:45
FBI agents arrested for securities fraud
By John Labate in New York
Two agents for the Federal Bureau of Investigation were among those arrested
on racketeering and securities fraud charges in a scheme in which
confidential FBI information was used to trade and illegally manipulate
stocks.
The US Attorney's office in Brooklyn said on Wednesday in its indictment
that the scheme was led by Amr Elgindy, a well- known internet trader and
stock newsletter analyst better known as Tony Elgindy.
The FBI agents, Jeffrey Royer and Lynn Wingate, stood accused of disclosing
confidential information from FBI national crime databases to Mr Elgindy and
two of his business partners.
The FBI files were used as the basis to buy or sell various shares. During
the height of the late-1990s bull market Mr Elgindy became a cult figure
among internet traders because of his popular commentaries on companies.
Prior to that he was a licensed securities broker.
US officials said on Wednesday that the scheme involved the "short-selling"
of stocks, in which the expectation is that the price would decline, based
on the confidential FBI reports.
Once the short trades were established, Mr Elgindy and others allegedly used
various manipulation tricks to lower the prices, including spreading
negative information through the internet.
Mr Royer, who was still an FBI special agent at the time of the scheme, was
wired more than $30,000 in exchange for the information he passed on,
according to the indictment. He left the FBI late last year to work with Mr
Elgindy.
The other FBI agent allegedly involved in the scheme, Lynn Wingate, has been
an FBI special agent since 1999 and is currently assigned to the bureau's
office in Albuquerque, New Mexico.
The five were also charged on Wednesday with using the confidential material
to extort company insiders, including threats to report a company's
activities to the FBI or Securities and Exchange Commission.
US officials also filed civil forfeiture action yesterday for the release of
funds on deposit in numerous accounts held on behalf of Mr Elgindy, as well
as several cars and his primary residence, bought last year for $2.2m.
They face as much as 20 years each in prison on the racketeering charge,
plus fines, and another 20 years for the extortion charge. |
