Interesting reading some of the excerpts to see exactly what was going on in plain view, self-styled "cyber sleupps" claiming to be good samaritans, when, in reality, pockets were being lined in criminal fashion, and no "means" was too dirty if it justified their own version of what was "right."
In 1998, Elgindy founded a company called Pacific Equity
Investigations that administered two websites, one that was
publicly accessible with the address “www.InsideTruth.com” (“the InsideTruth site”) and one that was available only to paying subscribers with the address “www.AnthonyPacific.com” (“the AP site”).3 The InsideTruth site presented itself as a research tool that sought to uncover and reveal negative information about publicly-traded companies. The AP site sought to profit from these revelations by providing its subscribers with recommendations about which stocks to “short.”4
In 2000, through a co-conspirator named Derrick Cleveland
(who testified for the Government at trial), Elgindy began
receiving misappropriated information from co-defendant Jeffrey Royer, who was then a Special Agent of the Federal Bureau of Investigation (“FBI”) in Oklahoma City. In the early summer of 2000, Royer informed Cleveland of the existence of an ongoing overnment investigation of a company called Broadband Wireless (“BBAN”). Cleveland passed the information on to Elgindy, who then profited by shorting shares of BBAN. As a result of this. success, Elgindy solicited Cleveland to relay further such
confidential law enforcement information from Royer.
Eventually, Royer began passing information directly to Elgindy, as well as passing information through Cleveland.
As the scheme evolved, Royer, who was assigned to the FBI’s
“white collar crime” unit, would obtain confidential information by performing searches in the FBI’s Automated Case Support computer database and in the criminal history database maintained by the National Crime Information Center, as well as by contacting personnel of the Securities and Exchange Commission (“SEC”) and asking them to perform searches in the SEC’s confidential Name Relationship Search Index database.
Royer would convey the misappropriated information to Elgindy, who would in turn convey the gist of it to subscribers to the AP site and instruct the AP site members to short the stock but not yet release the information to the public. Then, when Elgindy gave the signal, the AP site members would use the InsideTruth site and other media to disseminate the misappropriated information to the general public, and thereby profit from the resulting drop in
the stock’s price. Elgindy kept close control over his AP site
subscribers and even threatened to exclude them from the site if they failed to follow his trading instructions.
|
