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Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: semperfijarhead who wrote (3237)	6/3/2002 11:42:18 AM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 12465

Re: 6/3/02 - Reuters: Court Upholds SEC Power to Sue Brokers Court Upholds SEC Power to Sue Brokers Monday, June 03, 2002 10:50 a.m. EDT WASHINGTON (Reuters) - A unanimous U.S. Supreme Court on Monday upheld the Securities and Exchange Commission's power to sue brokers to recover investors' money when the brokers sell their clients' stock for personal gain. The high court ruling overturned a decision the agency said would have seriously undermined its ability to protect investors against fraudulent actions by a stockbroker. The case involved Charles Zandford, a former broker in Bethesda, Maryland, who opened an account in 1987 for William Wood and his mentally retarded daughter with $419,255 to invest at Zandford's discretion. Three years later, the money was gone after Zandford repeatedly sold securities in the Woods' account and transferred the proceeds to accounts he owned or controlled. A federal jury in Maryland found Zandford guilty on 13 counts of wire fraud and sentenced him to 52 months in prison. The SEC brought a civil action against Zandford in 1995 alleging he issued checks to himself from money drawn from the Woods' account. The SEC said Zandford's wire fraud conviction was enough to show he had violated securities rules. A U.S. appeals court disagreed, ruling that Zandford was found guilty of wire fraud, but that it was not in connection with selling or buying securities. Justice John Paul Stevens said in the high court's opinion that the appeals court was wrong. He said that neither the SEC nor the Supreme Court has ever held there must be a misrepresentation about a particular security's value to run afoul of the law. Stevens said the law, which was designed to ensure an honest securities market and to promote investor confidence after the 1929 market crash, should be construed flexibly, not technically and restrictively. Concerning the specific allegations against Zandford, his conduct was "in connection with the purchase or sale" of a security under the meaning of the law, Stevens concluded. Copyright © 2002 Reuters Limited. news.lycos.com

To: semperfijarhead who wrote (3237)	6/4/2002 2:25:28 AM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 12465

online.wsj.com Ex-FBI Agent Involved in Scheme To Be Released on $500,000 Bail By CAROL REMOND DOW JONES NEWSWIRES NEW YORK -- A federal judge reluctantly agreed to release a former Federal Bureau of Investigation agent accused of participating in an alleged short-selling scam with popular Internet stock-commentator Amr (Anthony) Elgindy. U.S. District Court Judge Raymond Dearie said he would agree to the release of Jeffrey Royer if his family and former in-laws, who are willing to put up about $500,000 to secure his release, understand that any violation of Royer's condition of release will lead to the forfeiture of the bail money. Mr. Royer will remain behind bars until proper documentation for his bail is provided to Judge Dearie. Lawrence Gerzog, a lawyer for Mr. Royer, said it would likely take two days. Mr. Royer and Lynn Wingate, another FBI agent, are charged with providing confidential government information to Mr. Elgindy and two of his associates. The government alleges that the information provided by Mr. Royer and Ms. Wingate was used by Mr. Elgindy and his associates to put pressure on stocks that they were short-selling. And on some occasions, allegedly to extort free or cheap shares from the companies they targeted. Ms. Wingate, who is now on leave, is currently free on bail. Meanwhile, Mr. Elgindy remains in jail in San Diego without bail after prosecutors convinced a judge that he is a flight risk. Mr. Elgindy associates Derrick Cleveland and Troy Peters are also out on bail. Mr. Royer was incarcerated last week after the prosecution charged that he violated the condition of his release when he contacted a potential witness in the case. Judge Dearie admonished Mr. Royer in court Monday, saying that the ex-FBI agent's conduct when he contacted law enforcement officers in Gallup and Albuquerque, New Mexico, was not only a colossal misjudgment, but also, "an act of outrageous arrogance." Write to Carol Remond at carol.remond@dowjones.com Updated June 3, 2002 6:37 p.m. EDT KJC