All I can say is "WOW" !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Read this and weep SUCKERS!!!!!!!!!!!!!! (that means you too, smartyts)
You guys have been conned big time.
Floyd and smartytyts, isn't this about the dearest of your friends?
Source: theStreet.com (just received).
Please don't take it personally, unless you can't help it.
Truth Serum: Internet Gadfly Meets a Fraud Case He Doesn't Like
By Beth Kwon
Staff Reporter
12/2/99 7:56 PM ET
Life has gotten tough for Anthony Elgindy. The San Diego short-seller,
known for his scathing posts on Silicon Investor, claims to uncover the
shady side of Wall Street. But these days, it's Elgindy's past that's
raising questions.
Elgindy, a 32-year-old former Nasdaq market maker and retail broker,
has taken it upon himself to expose scam stocks, in the process
cultivating an extremely loyal following on Go2Net's (GNET:Nasdaq)
message board service, Silicon Investor.
The following that he built posting under the handle "Anthony@Pacific"
helped him get reinstated to SI by popular demand after he was booted
off the site in August for what SI calls "terms of use violations."
He's parlayed that pseudo-stardom into Anthony@Pacific, a private
trading site he launched in May, attracting some 300 members to pay
$600 a month for his trading calls. In October, he helped fund a new
investor message board, WallStreetStand, which had 500 members signed
up even before it officially launched.
For his part, Elgindy says he has spent the last five years crusading
for the investment community. He testified as a witness in a 1997 civil
stock-manipulation trial in Los Angeles federal court and says he has
given information to the Securities and Exchange Commission about
suspect equities.
Yet not even the SI dispute, or a fine leveled against him in 1997 by
the National Association of Securities Dealers, or the revocation of
his NASD registration last year, keeps Elgindy down. In fact, stories
run by established news organizations still refer to him as an analyst,
failing to acknowledge or disclose his past, his positions or his
message board caterwauling.
Last week, in the wake of the stunning run-up in shares of
remote-access equipment maker Ariel (ADSP:Nasdaq), SmartMoney.com, Dow
Jones and the Chicago Tribune quoted him as an analyst with his
company, Pacific Equity (the firm's full name is Pacific Equity
Investigations). "There is a misperception that remote access means
wireless," Elgindy was quoted as saying in a Dow Jones story. The
article omitted the fact that their "analyst" may have been biased,
since he was shorting Ariel.
On the message boards, he was less tactful. "ADSP Short @ 13 !!!!!!news
is completely meaningless and anyone who thinks it is related to
wireless technology will be sadly stuck like PIGS!!," Elgindy posted
Wednesday on Silicon Investor.
Elgindy's bulletin board bravado doesn't show up when he's cited by the
mainstream media.
And his detractors gloated when the stock climbed to reach as high as
57 Friday from around 19, before closing at 37. "I'd love to see this
guy standing in a soup line!" a trader who goes by the handle "Sly"
wrote the following Sunday.
But more than a poor trading call surfaced after Ariel. On Saturday, an
investor who goes by the alias "a_and_p_sucks" posted on Yahoo! Finance
certain court filings in a criminal case brought against Elgindy. That
posting provided some information on the past of someone who tries to
blow the whistle on suspect equities.
No, we're not talking about the fact that Elgindy was fined $30,000 by
the NASD in 1997 for performing trades in 1993 on a system designated
for retail customers. That has been public knowledge and hasn't
deterred Elgindy's followers. ("I didn't know anything about trading; I
didn't know how the machines worked. If you hit the wrong button, it'll
be a violation," Elgindy says of the disciplinary action.)
The posting instead contained a June 16 indictment of Elgindy by the
U.S. attorney for the Northern District of Texas on nine counts of mail
fraud and aiding and abetting.
The charges were related to compensation checks Elgindy allegedly
received from Bear Stearns (BSC:NYSE) and Barron Chase Securities in
1994 and 1995 while he was simultaneously receiving $7,550 a month in
disability benefits from MassMutual. (The mail-fraud charges stem from
the delivery method of the disability checks.)
According to the indictment, Elgindy received $68,952 to work as a
registered representative in Bear Stearns' Dallas private client
service department from March 15, 1994, to July 8, 1994, and $16,000
from Barron Chase from October 1994 to February 1995. The case is
scheduled to go to trial in March.
"It's a 7-year-old case and doesn't involve the stock market or
anything," says Elgindy, who pleaded not guilty to the charges and says
he was suffering from clinical depression at the time he was receiving
disability benefits. "This is a cloud hanging over my head, and I'll
fight it."
If convicted, Elgindy could face up to $2.25 million in fines and 45
years in prison.
Sure, a disability dispute doesn't have much to do with stock trading.
But it's at least embarrassing for someone who champions the cause of
investors in digging up frauds to be himself accused of mail fraud.
After the allegations appeared on Silicon Investor, some members
questioned Elgindy. "Is it true that you are currently under indictment
for securities / mail fraud? If it were, sure this would reflect upon
your credibility here," wrote "zaxbowow." Elgindy responded, "My
credibility is 100% intact ... what u say isn't true."
Add to that a recent split with Matt Tyson, Elgindy's former lawyer,
who was also the Web master and owner of his private site, and it
promises a circus of accusations.
To hear Elgindy tell it, there was a financial dispute between Tyson
and Elgindy. (Tyson's company, TC Ventures, owned and operated
Elgindy's private site.) It worsened when, Elgindy says, Tyson refused
to let a third party handle the money. Tyson, on the other hand, says
his company delivered checks for roughly $40,000 per month to Elgindy
and that Elgindy violated their contract by telling members to cancel
their memberships and by steering them to another private site he was
building.
"Mr. Elgindy is a world-class salesman," says Tyson. "He can sell
glasses to a blind man. He has snowed over a large number of his
members."
According to the NASD, Elgindy's registration was revoked last year for
failure to pay an arbitration award in December 1998. Further, he never
paid the $30,000 fine: Elgindy says he voluntarily left the NASD by
stopping payments on the fine.
But as for the fraud indictment, Elgindy says it is a thing of the
past. "It was a very difficult time," Elgindy says. "I was depressed, I
was taking medication, my wife left me."
Maybe the judge and jury will buy Elgindy's version of the events. And
his followers may be well advised to watch their leader carefully.
We're depending on our readers for sources, rumors and ideas. Send any
to our Truth Serum hotline at truth@thestreet.com. |
