Insider Info Basher and King of Short & Distort Indicted.
DJ 2 FBI Agents Indicted In US Stock Fraud
NEW YORK (AP)--Two FBI agents helped a stock analyst extort publicly
traded companies by providing confidential information on
investigations of the companies, authorities alleged Wednesday.
Lynn Wingate, an FBI agent assigned to the bureau's Albuquerque,
N.M, office; Jeffrey Royer, a former agent who resigned late last
year; and analyst Amr "Tony" Elgindy were among five defendants
charged in a securities fraud indictment unsealed in federal court in
Brooklyn.
The indictment accuses the agents of using FBI databases to provide
their co-conspirators with inside information, and also to track a
grand jury investigation targeting the alleged scheme in exchange for
cash.
The charges "reveal a shocking partnership between an experienced
stock manipulator and law enforcement agents, undertaken for their
illicit personal financial gain," said U.S. Attorney Alan Vinegrad.
Elgindy and an associate, Troy Peters, were in custody in San Diego;
Royer and Wingate in Albuquerque; and the fifth defendant, another
Elgindy associate, Derrick Cleveland, in Oklahoma City, pending court
appearances.
If convicted of conspiracy, each defendant could receive 20 years in
prison.
(END) DOW JONES NEWS 05-22-02
12:37 PM
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DJN: =DJ Govt Says Elgindy Used Secret FBI Info To Manipulate Stks
(Dow Jones 05/22 12:47:06)
By Michael Rapoport and Carol S. Remond
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Anthony Elgindy, the controversial short-seller and
Internet stock commentator, has been charged with manipulating stocks by
using secret government information fed to him by collaborators within the
Federal Bureau of Investigation.
Elgindy was indicted by the U.S. Attorney's office 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 FBI agent, were also indicted.
The indictment alleges that 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.
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 Elgindy's e-mail newsletter and
investment Web site received the information also, prosecutors said.
In addition, according to the indictment, Elgindy extorted free or cheap
shares of stock from the insiders of companies he had targeted in exchange
for his agreement to lay off - to stop shorting the companies and stop
spreading negative information about them.
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 Elgindy gleaned information about the probe from an FBI
database and told Elgindy of the direction of the investigation and that he
was a target, according to the indictment.
A woman at Elgindy's home hung up the phone on a reporter who called seeking
comment. Elgindy's attorney couldn't immediately be reached.
WSJ Interactive:
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 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.
He 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.
In addition, according to the indictment, 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 the phone on a reporter who called seeking comment. Mr. Elgindy's attorney couldn't immediately be reached.
Write to Michael Rapoport at michael.rapoport@dowjones.com and Carol Remond at carol.remond@dowjones.com
Updated May 22, 2002 1:13 p.m. EDT
FBI Agent Charged in Insider Trading Ring
Wed May 22, 3:17 PM ET
NEW YORK (Reuters) - An FBI (news - web sites) special agent and a former agent were among five people indicted for using confidential law-enforcement information to operate an insider stock market trading and extortion ring, prosecutors said on Wednesday.
The indictment, unsealed on Wednesday, charged that Jeffrey Royer, an FBI agent until last December, and agent Lynn Wingate, disclosed details from FBI databases to trader and analyst Amr Elgindy and his associates Derrick Cleveland and Troy Peters, who used the information to short-sell stock.
The indictment did not specify which publicly-traded companies were targeted or put a specific dollar-value on profits made through the short-selling, a strategy whereby an investor profits when a company's stock price falls.
"The allegations in the indictment reveal a shocking partnership between an experienced stock manipulator and law enforcement agents, undertaken for their illicit personal financial gain," said U.S. Attorney Alan Vinegrad.
The defendants, all arrested Tuesday, are charged with racketeering conspiracy and securities fraud conspiracy. Elgindy, Royer and Peters were also charged with extortion conspiracy, while Elgindy, Royer and Wingate were charged with obstruction of justice and obstruction of justice conspiracy.
"That both a current and a former FBI special agent are among the defendants in this investigation is particularly distressing to the thousands of men and women of the FBI ...," said Kevin Donovan, assistant Director-in-Charge of the FBI in New York.
USED THE INTERNET
The racketeering conspiracy count carries a maximum sentence of 20 years as does the extortion charge. The other charges carry lesser sentences and fines.
The indictment alleges Elgindy and his cohorts used the confidential information to short-sell stocks and then disseminated the information via the Internet to other traders to encourage them to short sell as well, thus pushing down share prices so the first short sellers could maximize profits.
Elgindy owned and operated, together with Cleveland, Pacific Equity Investigations, InsideTruth.com, a public investment Web site, and AnthonyPacific.com, a subscription e-mail newsletter and subscription-based investment Web site.
Extortion charges resulted from efforts to extract payments from companies in return for not disseminating sensitive information, the indictment said.
Royer was hired by Elgindy's Pacific Equity firm after he quit the FBI in December 2001, according to the indictment, which claims that he later recruited Wingate of the FBI's field office in Albuquerque, New Mexico, to collect information.
]In addition to the criminal case, the government also filed a civil forfeiture action seeking to forfeit funds on deposit by Elgindy and Royer, along with vehicles including a Rolls Royce Bentley, a Jaguar and a Hummer, and the primary residence of Elgindy, which was purchased a year ago for $2.2 million.
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:=) Gary Swancey
