Anybody here see that the beloved? short seller Anthony has been arrested, and is charged with conspiring with 2 FBI agents?
From the WSJ>
Short-Seller Elgindy Is Charged
With Manipulating Stock Prices
By MICHAEL RAPOPORT and CAROL S. REMOND
DOW JONES NEWSWIRES
NEW YORK -- Anthony Elgindy, the controversial short-seller and Internet stock commentator, was arrested on charges of manipulating stocks by using secret government information fed to him by collaborators within the Federal Bureau of Investigation.
Mr. Elgindy, who lives in the San Diego area, was arrested at his business on Tuesday, Jan Caldwell, a spokeswoman for the San Diego field office of the FBI, said Wednesday.
Mr. Elgindy, 34, was indicted by a federal grand jury in Brooklyn, N.Y., on charges of racketeering, insider trading, market manipulation, extortion conspiracy and obstruction of justice. Four other people, including a current FBI agent and a former agent, also were indicted.
The indictment alleges that Mr. Elgindy, through his FBI contacts, obtained confidential information from FBI databases about criminal history and investigations relating to companies that he was shorting or thinking of shorting. A short-seller sells borrowed shares and profits when a stock declines, so exclusive access to negative information about a company would be valuable to a short.
Mr. Elgindy then used the secret information to decide how to invest, prosecutors say, and distributed it to other short-sellers to encourage them to short the stock also. Paid subscribers to Mr. Elgindy's e-mail newsletter and investment Web site received the information also, prosecutors said.
U.S. Attorney Alan Vinegrad said the indictment's allegations "reveal a shocking partnership between an experienced stock manipulator and law-enforcement agents, undertaken for their illicit personal financial gain."
The indictment also said that Mr. Elgindy extorted free or cheap shares of stock from the insiders of companies he had targeted in exchange for his agreement to stop shorting the companies and stop spreading negative information about them.
Mr. Elgindy was even able to spy on the government's grand jury investigation of him through his FBI contacts, prosecutors allege. One of the FBI agents indicted along with Mr. Elgindy gleaned information about the probe from an FBI database and told Mr. Elgindy of the direction of the investigation and that he was a target, according to the indictment.
A woman at Mr. Elgindy's home hung up on a reporter who had phoned seeking comment. Mr. Elgindy's attorney couldn't immediately be reached.
According to the indictment, Mr. Elgindy sometimes reported negative information about the companies he was targeting to government regulators in order to try and prompt investigations. One person he provided with information was Jeffrey A. Royer, then a special agent in the FBI's Oklahoma City office.
After that, allegedly Mr. Elgindy "corruptly induced" Mr. Royer to provide secret information from FBI databases, such as data about the criminal history of officials at public companies, even though access to that information is strictly limited to law-enforcement personnel. An associate of Mr. Elgindy wired more than $30,000 to Mr. Royer, according to the indictment.
Mr. Elgindy used the information to make investment decisions, and disseminated it to other short-sellers, first, through subscribers who paid the self-styled online investment guru up to $600 a month for his recommendations and, later, through public Internet sites, the indictment alleges.
In one instance, Mr. Royer found criminal-history information in an FBI database about Paul Brown, the founder of Nuclear Solutions Inc., and passed it to Mr. Elgindy, who shorted the stock and distributed a report to his subscribers last December calling Mr. Brown "a convicted felon." Nuclear Solutions' stock fell sharply in the aftermath of Mr. Elgindy's report.
A Nuclear Solutions spokesman couldn't be reached for comment.
Mr. Royer, 39, of Encinitas, Calif., later moved to a New Mexico FBI office and eventually took a job with Mr. Elgindy. He was indicted along with Mr. Elgindy, whose real name is Amr Ibrahim Elgindy. Mr. Elgindy, a native of Cairo, Egypt, is known by the alias Anthony@Pacific.
Also indicted was Lynn Wingate, 34, a special agent in the FBI's Albuquerque, N.M., office. The government alleges that she, too, supplied Mr. Elgindy with secret FBI information. Derrick W. Cleveland, 36, of Oklahoma City, and Troy M. Peters, 40, of Carlsbad, Calif. -- two short-sellers and associates of Mr. Elgindy -- also were named in the indictment.
Write to Michael Rapoport at michael.rapoport@dowjones.com and Carol Remond at carol.remond@dowjones.com
Updated May 22, 2002 4:47 p.m. EDT |
