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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Janice Shell who wrote (88057)	11/17/2004 9:06:20 PM
From: StockDung	Respond to of 122087

Testimony Of First Witness In Elgindy Case Wraps Up By Carol S. Remond Of DOW JONES NEWSWIRES 506 words 17 November 2004 14:40 Dow Jones News Service English (c) 2004 Dow Jones & Company, Inc. NEW YORK (Dow Jones)--Defense lawyers Wednesday continued taking aim at government witness Derrick Cleveland's claim that he and others participated in a corrupt scheme to use confidential federal information to manipulate the price of the shares of publicly traded companies. In his 10 days on the witness stand, Cleveland has testified that he got information from former Federal Bureau of Investigation special agent Jeffery Royer and that he shared that information with Anthony Elgindy and other short sellers who used the tips to profit from trading stock. Elgindy's and Royer's lawyers meanwhile have claimed that the FBI agent was simply trying to gather information from Cleveland and other traders in an effort to ferret out stock fraud. The defense lawyers have also argued in their cross examinations of Cleveland that the government witness overstated the nature of his relationship with Royer and Elgindy. They suggested that Cleveland is trying to make their clients take the blame for his actions. Cleveland has pleaded guilty to conspiracy to commit securities fraud. Elgindy and Royer are accused of committing securities fraud, market manipulation and extortion in the Eastern District for the District Court of New York. Questioning Cleveland Wednesday, Elgindy's lawyer Barry Berke used chat logs to demonstrate that on several occasions, Cleveland began short selling the shares of companies after Elgindy made "short calls" about them on his private investing Web site, and not, as Cleveland claimed, after receiving confidential information from Royer. Berke also grilled Cleveland on his claim that Elgindy used non-private information provided by Royer to make trading decisions. Using chatlogs from Elgindy's Web site, Berke highlighted that Elgindy would often contact agents at the Securities and Exchange Commission and the FBI to report stock fraud and that on occasions, Elgindy gleaned information from these calls. In the case of a company called Sulphco Inc. (SLPH), Berke used chatlogs to show that a former employee of the company named Todd Orme began helping Elgindy debunk the company's claim that it could remove sulfur from diesel fuel. "Orme in July (2001) was talking to the FBI on behalf of Sulphco, blaming Elgindy. You recall that?" Berke asked Cleveland, who answered yes. The witness agreed with Berke that Orme later recanted his allegation against Elgindy and then began helping the short seller. Cleveland had testified for the government that he got information from FBI agent Royer about Sulphco that he passed on to Elgindy. Cleveland also testified that Royer intervened to make a budding FBI investigation into Elgindy's actions relating to Sulphco go away. Following the conclusion of the morning session, federal judge Raymond Dearie reminded Berke that he had to complete his cross examination of Cleveland shortly after the lunch recess. Prosecutor Ken Breen is then expected to "redirect" the witness. -By Carol S. Remond, Dow Jones Newswires; carol.remond@dowjones.com; 201-938-2074 [ 11-17-04 1440ET ]

To: Janice Shell who wrote (88057)	11/17/2004 11:55:44 PM
From: Bear Down	Respond to of 122087

when I used to report things to the SEC, the agent would usually laugh and say "let me guess, you are short?" And a few of those got halted... lucky me :) Then one day a not so bright FBI agent told me he thought it was criminal sock manipulation to hold a short position and report the company in hopes of a profit. I never again reported a stock to him or any other government agent. Ironic that one can short a stock, know fraud exists, but not be allowed to report it or be guilty of manipulation. In my opinion, that is one deranged interpretation of the law.

To: Janice Shell who wrote (88057)	11/18/2004 3:19:03 AM
From: tralfasador	Read Replies (1) \| Respond to of 122087

Berke also grilled Cleveland on his claim that Elgindy used non-private information provided by Royer to make trading decisions. Using chatlogs from Elgindy's Web site, Berke highlighted that Elgindy would often contact agents at the Securities and Exchange Commission and the FBI to report stock fraud and that on occasions, Elgindy gleaned information from these calls. Gerzog also asked the government witness about his testimony that Royer invited Cleveland to meet with one of his informants, a woman named Pam Humphrey. Cleveland testified in court that Royer shared with him FBI documents about two companies called Energas and Potomac Energy following the meeting with Humphrey. Under cross examination, Cleveland agreed that the documents came from Humphrey and not the agent. Gerzog suggested that given that Humphrey was supposed to be helping the FBI in its investigation of Broadband Wireless, it made sense that the agent asked Cleveland, at the time an informant supposed to be helping the government, along for the meeting. +++++++++++++++++++++++++++++++++++++++++++++++ Janice you say "Nonsense. Neither the FBI nor the SEC ever tells anyone anything specific." That is false. And its already been shown to be false in this very case. Mr. Royer gave his "informant" specific information and put Mr. Cleveland in contact with these people. Usually an informant, informs, and is not an investigator, as shown in this case. If the reporter for Dow Jones is correct, she said GLEANED....not DEDUCED. I am going by her reporting, but there is a big difference from what she is saying and what you are. Gleaned means "To collect bit by bit: “records from which historians glean their knowledge” (Kemp Malone). See Synonyms at reap." That is not deduction. Its a methodical means of collecting information. So it can now be argued that Mr. Elgindy was reporting things to the FBI and SEC, not for the act of reporting it, but for the ability to extract (glean) information out them. Now do you see why I am saying the defense lawyers are messing up? My only point is Mr. Elgindy's lawyer just handed the prosecutor's this entire angle. Look at the quotes I put at the top of this post. That is not a good defense to these specific charges.