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

To: Anthony@Pacific who wrote (92424)	9/8/2005 4:09:02 PM
From: SI Bob	Read Replies (4) \| Respond to of 122087

I misworded it a bit. "any statements" should be "any opinions". All the wording aside from my intro was Tony's words. Personally, this bothers the hell out of me in much the same way Alternative Minimum Tax does. The government can make you pay them more than you made. $12MM is absolutely ridiculous, IMO! Basically "He committed a crime, so take everything." Makes me a little more scared to even see a cop car. There's a lot about this case that has really bugged me all along, and when I saw this, I simply couldn't believe it. A $12 million "disgorgement" for $41k of alleged ill-gotten gains. And it was a bad thing for him to have made most of that gain from shorting SEVU? Did anyone other than Franchwa not know that one was a scam?

To: Anthony@Pacific who wrote (92424)	9/8/2005 11:01:44 PM
From: Man on the moon	Read Replies (2) \| Respond to of 122087

much of what propels this case along is the lack of easily available public information on it. Nice job of making this post. I wish you the absolute best in this incredible matter and thank you also for reminding us of the the dark side of our justice system.

To: Anthony@Pacific who wrote (92424)	9/9/2005 5:10:00 AM
From: Jeffrey S. Mitchell	Respond to of 122087

As I know that long posts make one's eyes glaze over, I've cut out a portion of the Elgindy forfeiture document that I would urge everyone to read. Putting one's personal feelings about Tony aside, is it proper (fair) that even though Elgindy's illegal profits are pegged at $41,897.89 that he must forfeit $11,850,909.05? Remember that jail time is based on this forfeiture figure. - Jeff ===== Mr. Elgindy respectfully submits this memorandum of law in opposition to the government’s proposed findings of fact on the criminal forfeiture allegations. The government’s proposed forfeiture of $11,850,909.05 is not a proper forfeiture under either 18 U.S.C. § 1963(a) (RICO criminal forfeiture) or 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. §2461(c) (criminal forfeiture based on securities fraud, wire fraud and extortion). The amount sought goes far beyond the ill-gotten gains that these forfeiture provisions are intended to reach. The government has not proven and, we respectfully submit, cannot prove, that the government’s nearly $12 million figure constitutes the “gross profits” that Mr. Elgindy would not have earned but for the illegal activities found by the jury. The government simply asserts without legal or factual support that Mr. Elgindy must forfeit every cent of site fees that was collected from the time he started Anthonypacific.com -- which was before the conspiracy iss even alleged to have begun -- and every cent he made trading any stock the government put in its trading exhibits -- including trading in stocks outside the 41 identified pretrial and in others never mentioned at trial -- and in addition, every cent made by a select group of people -- most of whom we never heard from at trial. The government does not even attempt to carry its burden of proving (1) what portion of the site fees would not have been acquired but for the illegal activity as opposed to legitimate business activity; (2) what stocks were involved in the illegal activity as opposed to legitimate business activity; (3) who the co-conspirators were and whether any of their trading was foreseeable to Mr. Elgindy; and (4) what trading profits were made as a result of the illegal activity as opposed to legitimate trading activities. The government’s unsupported assertions cannot form the basis of a contested criminal forfeiture. A proper forfeiture must link the property to be forfeited to the illegal activity for which Mr. Elgindy was convicted and we submit that in this case, the forfeiture should be limited in the following manner. Site Fees: Anthonypacific.com was overwhelmingly a legitimate site with legitimate members engaging in legitimate trading activity and therefore the portion of the site fees subject to forfeiture should be limited to those fees paid by the convicted codefendants who have admitted to insider trading based on information provided on the Anthonypacific.com website starting in October 2000. This amounts to $30,300. The government has not proven that any other member of Anthonypacific.com paid site fees for any reason other than to receive legitimate, lawfully-obtained information about stocks and benefit from Mr. Elgindy’s extensive trading experience. Mr. Elgindy’s Trading Profits: The portion of Mr. Elgindy’s trading profits subject to forfeiture should be limited to his profits from the alleged insider trading in only the four stocks as to which the jury found Mr. Elgindy had engaged in securities fraud: OSIN, PLMD, JUNM and SEVU (the “conviction stocks”). Using a method of calculating proceeds from insider trading that actually takes into account when alleged inside information regarding the four conviction stocks was disseminated to Mr. Elgindy and when the information would no longer be material (as discussed in detail below), Mr. Elgindy’s illegal profits on these stocks would be $41,897.89. As to any other stocks as to which the government submitted evidence of the dissemination of alleged inside information to Mr. Elgindy, there is no finding that insider trading occurred. Before any of these stocks can be considered for inclusion in any calculation of Mr. Elgindy’s “illegal” profits, the government must prove at a hearing and the Court must find (1) that the information disseminated about the particular stock was non-public and came from an FBI database or other law enforcement source; (2) that such information was material; and (3) that such information “informed” a particular trade by Mr. Elgindy in that stock. Other Individuals’ Trading Profits: Mr. Elgindy should not be required to forfeit the trading profits of any other individual. First, joint and several liability is inappropriate in this case because the allocation of the proceeds from the alleged illegal activity is easily determined. Each individual allegedly involved in the securities fraud conspiracy traded in his own account and retained his own trading profits. It is patently unfair for the government to seek forfeiture of these other individual’s trading profits from Mr. Elgindy alone when the government has access to these individuals and can seek forfeiture of their profits from them. Second, the requested forfeiture is grossly disproportionate to and inappropriate in light of the treatment of other convicted defendants. The record shows that as part of the alleged conspiracy, Derrick Cleveland and Jonathan Daws received and disseminated law enforcement information without Mr. Elgindy’s knowledge; yet, the government seeks no forfeiture from them of their retained trading profits. In fact, the government appears to have stipulated that Mr. Daws should be held responsible only for a sub-set of his own trading profits and not even for the trading profits of any of his alleged tippees. We submit that Mr. Elgindy should be treated no worse than the government has stipulated Mr. Daws should be treated and accordingly, Mr. Elgindy should be required to forfeit only his own trading profits from the alleged insider trading. Even if the Court were to determine that Mr. Elgindy could be required to forfeit trading profits of other site members, the forfeiture must be limited to the trading profits of the three convicted codefendants who testified at trial and specifically admitted to insider trading in specified stocks (i.e., Mr. Cleveland, Mr. Hansen and Mr. Terrell). Their insider trading profits in the four conviction stocks -- analyzed according to the parameters set out below -- would add $29,716.77. As to other alleged tippees, none of these individuals was ever called to testify that he either received the alleged inside information or that his trades where informed by such information. Before any of their trading profits can be considered forfeitable by Mr. Elgindy, the government must prove and this Court must determine (1) that the individual was a coconspirator; (2) that he received non-public information that came from an FBI database or other law enforcement source about a particular stock; (3) that such information was material; (4) that such information informed a particular trade in that stock; and (5) that his trading was foreseeable to Mr. Elgindy. In sum, Mr. Elgindy submits that the forfeiture should be limited to the site fees paid by convicted coconspirators who admitted to using Anthonypacific.com to obtain law enforcement information and to his own profits from insider trading in the four conviction stocks. Alternatively, Mr. Elgindy intends to vigorously contest at an evidentiary hearing the government’s assertions that he be required to forfeit close to $12 million.