NEWS FLASH!!! DOW JONES REPORTER SPECULATES THAT SEAVIEW MAY HAVE BEEN TARGETED IN ANTHONY@PACIFIC'S ALLEGED SHORT-SELLING SCAM:
The Shock That Shook The Shorts
23 May 08:00
By Carol S. Remond
A Dow Jones Newswires Column
(This report was first published Wednesday afternoon.)
NEW YORK (Dow Jones)--Call it the shock that shook the shorts. The tight-knit community of investors who make a living by betting that stocks will move lower received a lightning-like bolt Wednesday when federal officials arrested Anthony Elgindy, one of the best-known short sellers on Wall Street.
Elgindy was charged with a slew of securites-related offenses and, according to the federal indictment handed up by a Brooklyn, N.Y. grand jury, employed two agents of the Federal Bureau of Investigation to help him do so.
The alleged scheme involved Elgindy using the FBI agents to get non-public, often criminal background, information about executives at companies that he would sell to subscribers of his Internet-based service. He would allegedly later more broadly disseminate that information via Internet chatroom postings in an effort to make the target company stock prices move lower, therefore financially benefitting him and others who bought his information, all of whom had already shorted the stock.
The shock of one of their own getting arrested is bad enough. But here's some language from the indictment that has some short sellers scrambling for more information: "In order to maximize the adverse impact on the prices of certain stocks that he sold short...Elgindy communicated with other short sellers nationwide, including short sellers" in the New York area.
And later in the indictment: Elgindy, "together with others, traded on material, non-public information." The indictment mentions by name one company that Elgindy targeted, Nuclear Solutions Inc. (NSOL). The indictment says there were five other companies in which manipulation occurred but it didn't name them.
It's those five companies that short sellers are trying to figure out and whether they have any exposure to what happened. The timeframe of the events described in the federal indictment and an examination of public reports on one of Elgindy's websites, insidethruth.com, and email messages sent to subscribers of anthonypacific.com, suggest that the other companies may have been: Seaview Video Technologies Inc. (SEVU); Universe2U Inc. (UTOU) or possibly Ijoin Systems Inc. (IJON); Vital Living Products Inc. (VLPI); Duct Utility Contruction & Technologies Inc. (DUCT) and Eagle Building Technologies Inc. (X.EBT, formerly EGBT).
Officials from the companies were not available for comment.
A lawyer representing Elgindy wasn't immediately available for comment.
-By Carol Remond 201.938.2074; e-mail: carol.remond@dowjones.com
(END) DOW JONES NEWS 05-23-02
08:00 AM
