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

To: StockDung who wrote (88717)	12/11/2004 11:30:48 AM
From: a-hole	Respond to of 122087

Trial Update for those interested.... 12/10 2:03P (DJ) =DJ Prosecution To Rest Criminal Case Vs. Elgindy Friday Story 5376 (I/SCR, G/FBI, G/JUS, G/SEC, G/USG, N/DJN, N/DJPF, N/DJRT...) By Carol S. Remond Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Federal prosecutors Friday are almost done presenting evidence in their securities fraud case against short seller Anthony Elgindy and former Federal Bureau of Investigation special agent Jeffrey Royer. In five weeks of testimony, witnesses for the prosecution, some of whom pleaded guilty and made deals with the government, told jurors how FBI agent Royer would share confidential information with Elgindy and others who used it to manipulate the stocks of small companies. Elgindy, Royer and others are charged in the U.S. District Court for the Eastern District of New York with securities fraud, market manipulation and extortion. Defense lawyers for Elgindy and Royer are expected later Friday to start putting forward witnesses to substantiate their contention that Royer was simply trying to uncover securities fraud and that he developed a relationship with Elgindy and others to do so. Elgindy's lawyers have said that the San Diego short seller would pass information about crooked companies to Royer, who would then pass it on to others at the FBI or the Securities and Exchange Commission. Elgindy's lawyers have said they will call SEC lawyers to show that the short seller and online stock guru shared information about stock fraud with them. FBI agents who testified for the prosecution earlier this week said that Royer admitted freely that he planned to work for Elgindy and other short sellers after he left the FBI in December 2001. According to the testimony of FBI special agent Raymond Gonzales, Royer said he wanted to open a private investigation business and work with short sellers to uncover scams. Gonzales said Royer told him in December 2001 that he wanted to expose crooked companies because he himself had once lost a large investment in a bogus company. Gonzales testified that Royer, who was then aware of a post-Sept. 11 FBI investigation into Elgindy and potential ties to terrorism, offered to help the bureau's probe. E-mails introduced in court showed that Royer asked Elgindy about how to best deal with his mounting debts. But Elgindy's answers indicated that he was mostly preoccupied with securing an early release from his probation relating to a past mail fraud infraction. Witnesses testified that Elgindy made it a condition that his probation was terminated before Royer could start working for him. Elgindy asked Royer to write a letter supporting his early release from probation. Royer eventually wrote that letter. FBI supervisory special agent Doug Beldon told jurors Friday that it was improper for Royer to write a letter of recommendation for Elgindy in his capacity as an FBI agent. He said the FBI was not aware of it and wouldn't have approved it. Beldon, who in May 2002 was part of a team of agents that arrested Royer, said that Royer was compliant and that he freely admitted to using FBI databases to check out some information he got from Elgindy and another defendant named Derrick Cleveland. Cleveland pleaded guilty to conspiracy to commit securities fraud and testified earlier for the government. Special agent David Chaves is expected to conclude his ongoing testimony later this afternoon. -By Carol S. Remond, Dow Jones Newswires; 201-938-2074; carol.remond@dowjones.com