Subj: Open letter to TheStreet.com re Anthony@Pacific
An open letter to Beth Kwon and TheStreet.com editorial staff,
The undersigned object to your outrageously biased and scurrilous article on Anthony Elgindy and his trading website community. Your petty and distorted reporting is a classic example of the abuse of the power of the press, in an attempt to discredit and silence his criticism of the Wall Street Establishment. You have attempted to intimidate through inflicting personal embarrassment, using exaggerated scrutiny of private matters which are irrelevant, petty, and ancient history. While some of your historical facts are roughly correct, your exaggerated characterizations grossly distort the man, his efforts, and those who work with him. This letter attempts to set the matter straight.
It is frequently observed that short-sellers, while widely misunderstood by the investing public, are far more exacting in their due diligence than the typical "long side" investor. Those of us who work with Anthony know a great deal about him. His outspoken critiques of Wall Street's ugly underbelly have made his life an open book. We are not served by patronizing admonishments to "watch out for your leader". Instead, by using the inflammatory term "guru", and referring to his site subscribers as "followers", you spin his image to suit your own purposes. Nothing could be further than the truth.
First, Anthony's private site is composed of a few-hundred savvy investors who make all their own trading decisions. Account sizes of 5, 6, 7, and 8 digits are all represented. There are at least half a dozen trading professionals in addition to Anthony who announce all their trading positions to subscribers in real time. Every one of these traders has an enviable success rate, and lively debate on the merits and risks of positions is freely entertained. Hardly the image of a manipulative, dictatorial "guru" you portray. If we were not extremely successful in our position trades, nobody would continue to stay together and pay to do this. In fact, we hardly ever lose a member.
Anthony maintains a strict personal discipline of "calling" or disclosing his trades on the site prior to his own executions, affording every site member the opportunity to trade alongside him. (Note the pivotal difference between this trading activity and "front-running", an illegal activity indulged in many internet stock chat rooms, where an influential trader secretly loads up on position, then advises others to do so, while he unloads his position onto those who follow his call.)
With regard to your reporting of a recent "blown trade" in Ariel Corp. (ADSP), the inaccuracy of your reporting is totally exposed. For the vast majority of us on the site, shorting ADSP was incredibly profitable, and for many of us, it was our most profitable trade ever. (This stock was saw an insane 16-fold run-up in price prior to its inevitable collapse, which was induced by CNBC's erroneous reporting of the company's technology and a possible case of mistaken identity for a true wireless company.) For a handful of our mostly smaller traders who overcommitted early, forced liquidations and a short squeeze cost them their trading accounts. Anthony personally helped a small group of traders meet threatened margin calls, as well as initiated, with near-unanimous support of the site subscribers, a voluntary fund, overseen by an independent board, to help that handful of traders recover from their losses. Can you find a precedent for this among any trading group anywhere?
With regard to the charges against Mr. Elgindy, as has been widely chronicled, during the period 5 to 6 years ago when the circumstances occurred, Mr. Elgindy owned a brokerage firm which was the target of an organized criminal attempt to infiltrate, engage in illegal stock promotion, and ultimately effect a takeover of the firm. Mr. Elgindy lost his business, and was subject to extreme duress, including personal death threats against himself and his family, events which were understandably deeply distressing.
Nevertheless, he has had the courage to serve repeatedly as a government expert witness, resulting in numerous felony convictions and prison for the perpetrators of one of some of the biggest stock swindles of that era. Interestingly, the government agencies were all too happy to receive this assistance AFTER the period of his disability from which the charges against him are based.
For the record, Anthony has served as a government witness and/or aided prosecution in the following cases, as well as several others:
US Dept of Justice vs Melvin Lloyd Richards ( ALCO )
US Dept of Justice vs Peter Cahill ( ALCO )
US Dept of Justice vs James Ross ( ALCO )
US Dept of Justice vs Russell Armstrong ( ALCO )
US Dept of Justice vs Jordan Belfort
US SEC Enforcement vs Mike Zaman ( CNES stock )
US SEC Enforcement vs Waldron & Compnay ( IBUY stock )
NASD Enforcement vs Jerry Rosen ( QGLY manipulation )
US Dept of Justice vs First Colonial ( FCVL stock )
Texas vs Phillip Hickman ( for drug trafficking )
Texas vs Mario Gonzalez ( for drug trafficking )
Texas vs BRIAN ( attempted Murder )
RCMP vs Starnet ( SNMM stock )
US Dept of Justice vs Jack Newman ( NEET stock )
US SEC Enforcement Vs Solvez ( SOLV stock )
US SEC Enforcement Vs Ws Clearing
US SEC Enforcement Vs Bill Saydein
Anthony believes he is innocent of the charges, and will face his accusers in court. Hopefully justice and the truth will prevail. Meanwhile, it is transparently obvious from the details you report in this matter -- receiving some disability payments while officially on a payroll -- that the punishment does not fit the crime.
In considering the circumstances, the facts, and the draconian penalties threatened in this case, the most likely explanation is that a personal vendetta is being waged, and abuse of the justice system is its cudgel. We will see how this plays out. Like everything else about Anthony's trading career, it will be an open book.
It was a journalistic low point for you to rely upon the pathetic tattletaling of Mr. Elgindy's former attorney, and the owner of his former website, with whom he now has a private dispute, for your editorial direction. We wonder how many of you at the TheStreet.com could withstand the level of intense personal scrutiny Mr. Elgindy's private life has endured. We wonder if any of you would emerge unscathed if you applied the same editorial standards to all your authors' personal financial histories. We wonder, in fact, if the public offering of TheStreet.com stock, the full story of insider transactions, the full story of its insiders' efforts to influence its valuation in the market, wouldn't be a more useful exercise in protecting the public good.
We challenge you to do so, but we doubt we'll read about THAT in
TheStreet.com.
Yours truly,
Alan Schwartz [ACS_101]
[rogden]
Barbara J. Payne [MamaBear]
Skate
nikita
John LeGresley [Sharck]
[backdoc]
[alwayslatetotheparty]
[dmarkham]
Amit Ghate
[Chico]
James Matturri
Richard Granfield
Jonathan Kniss
Affable trader
MikeAnkley
and surely many others who were not available Sunday evening |
