DECLARATION OF ANTHONY ELGINDY
I, Anthony Elgindy, do declare the following:
1. From approximately 1993-1994 through May 22, 2002, the day of my arrest, I worked in two capacities as an agent for the United States Government.
2. Initially I was a formal CI with two handlers, IRS Agent Ron Bass and Postal Inspector Gary Lindsey, who were working with AUSA Yasmine Saide. I was taught how to conduct investigations and what procedures to follow in order to gather evidence that would help the government secure convictions of several people involving a $100 million stock scam .
3. I was successful in securing the guilty pleas of approximately 5 to 6 people in this endeavor. Once my official capacity as a CI was no longer needed, I proceeded to continue this type of work on a voluntary basis using my firm, Key West Securities, which was a NASDAQ market maker. I aided both the SEC and NASD regulators in at least 4-5 other unrelated Investigations, testifying both for the NASD and the SEC.
4. The SEC prosecution and my testimony in federal court resulted in a victory for the SEC and ultimately that case led to the indictment of an AUSA , Drew Pitt on corruption charges stemming from aiding “pump and dump” scams he was supposed to be investigating. I discussed this relationship and my testimony publicly and was proud of that service. Message 7421100
5. I testified against Mike Zaman, Smith Benton Hughes, Jerry Rosen, and provided on-the- record testimony for the government and the NASD.
6. In 1998 I resigned my membership in the NASD and formed Pacific Equity Investigations as a private citizen and investor. Part of my work was to seek out fraudulent companies and report them to authorities. Because of the numerous contacts I made, it became a relatively well-known fact that I was a trader/short seller who investigated and received exhaustive research through various sources.
I was frequently knew of or was able to deduce that there was an ongoing investigations at the SEC or by the FBI and/or the NASD level, primarily because I initiated and or was an integral information source for them. It was common knowledge that I was trading based on information that I had obtained through due diligence of my own or through my other contacts - a network that was likely superior to that of other traders. In addition on many occasions I simply assumed their was an investigation or there simply had to be, due to my ability to recognize what Regulators typically looked for. For Example: Message 7516935 & then Message 7550647
7. In 1998 I started a “free thread” on Silicon Investor.com , called “Dear Anthony” through which the public could access my missives, my thoughts and ideas, a “Dear Abby” of the stock market, if you will. This “thread” quickly became a very “hot” thread and became the most widely read “thread” on the world’s largest financial discussion site. At some point in time I became the most “book marked” person in the world, if you assume Silicon Investor was the most frequented financial discussion site in the world. I was becoming one of the most well recognized short sellers and online commentators in the US. I had been featured on ABC’s 20/20, Justice Files, Dutch TV, Australian TV, Macedonian TV, Forbes, BusinessWeek, The Denver Post , The Orange County Register, The New York Time, The WallStreet Journal, Investors Business daily,KDIF Radio, Barron's, and almost every other major Financial periodical. There was no secret about what I did and why I was doing it.
Despite the 2000 conviction resulting from a 1994 offense, from 1995 through May 2002, the government continued to use information from me, my website, and other associates to launch investigations, sue companies and convict many of the officers and companies we targeted. I was always considered a reliable and truthful witness , and testified for the SEC and the NASD and aided other regulatory agencies. I believe that most of the companies named in the superceding indictment have had some type of action taken against them by the government that validates our positions and our information. I fully disclosed to the government, including my probation officers, the SEC, the NASD that I was trading in these companies short and investigating them at the same time. My actions were lawful, necessary, beneficial and timely and aided the market. Dissemination of negative truthful and accurate information and news about a company helps all shareholders learn many of the very facts and issues that management will not or refuses to disclose despite the SEC’s own requirement that all publicly traded companies disclose not only positive material news but the negative as well. I was continuously praised by FBI & SEC agents for the good work others and I were doing.
I was told by my probation officer that I could not work as a CI unless I received permission from the sentencing court,however I received explicit permission from my probation officer that I could direct the results of my investigation to law enforcement each month. As part of my investigations, I was also given permission by my probation officer to interact with convicted felons, My probation officer and I discussed my trading and my reports as well as communications from Royer and other Federal, State and Regulatory authorities on a constant basis. ( These Probation records were UNSEALED 3 MONTHS AFTER MY ARREST..meaning the GOVT didnt know all of this till after i was arrested...a very significant fact IMO )
8.) While I served my four-month sentence at Taft Correctional Camp I was recruited by SIS ( Special Investigative Services )to aid them and the Department of Justice in identifying corrupt guards, inmates and or illegal items being smuggled into the facility. I did this from approx July-August of 2000 through my release date of Oct 6, 2000. I wore a body wire and walked among the general population risking my life for the authorities and US Government.
9 .) “At all times I believed any information shared by agents of the SEC, FBI or any regulatory or law enforcement agencies was shared lawfully. At no time did any employee or agent of the SEC, FBI, or any other regulatory or law enforcement agency advise me that any information being provided was provided unlawfully or without full authority to provide it to me. At no time did I ever solicit from any SEC, FBI or agent of any regulatory agency any information that was intended to enhance or assist my trading, or the trading of my site members.
I also believed that if any information was sensitive, it is and was the duty of the Govt trained and employed Agents to know what they can and cannot say. I cannot fairly bear any of that responsibility. I was told and made to feel time and time again by federal law enforcement and by the SEC that I and my website were an integral part of many investigations. I declare that I was always under the impression that what I was doing was lawful and good and helpful to the government and for the public good. I considered myself to be an informal informant. Unfortunately this relationship ended the day of my arrest, apparently after the horrific events of September 11, Certain government officials were swayed in New York and Washington DC to begin looking at me because of my Arabic heritage and also short sellers in general were being wrongfully blamed for market weakness.
10.)At no point in time did I ever have any knowledge that Mr. Cleveland and Agent Royer had an ongoing and secret financial relationship. Lastly I have never ever paid nor promised any Agent or SEC enforcement or regulator anything in exchange for any information whether it was sensitive or not. No “ lucrative job” was ever given to Mr Royer from the time he left the Bureau till the day of his arrest.
I declare under penalty of perjury that the foregoing is true and correct. This declaration was executed on September 24, at San Diego, California.
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Anthony Elgindy |
