Post by jannikki on Jun 21, 2006 17:03:40 GMT -4
Encinitas-based stock guru intends to appeal
By Dean Calbreath
STAFF WRITER
June 20, 2006
Encinitas short-seller Anthony Elgindy was sentenced to more than 11
years
in jail yesterday for manipulating stocks of small companies he was
investing in.
Elgindy, who was found guilty in federal court in New York in January
2005
of securities and wire fraud, conspiracy and extortion, also was
ordered to
forfeit $1.5 million.
Advertisement
Eric Tirschwell, Elgindy's lead attorney, declined to comment on the
sentencing but said his firm had told U.S. District Judge Raymond
Dearie
that it intended to appeal.
Elgindy has been in jail since April 2004, when he tried to use fake
identification to board a flight to San Diego from New York - a flight
that
would have violated his bail agreement.
His two years behind bars will count as time served, shaving off time
from
yesterday's 135-month sentence.
Elgindy was found guilty 17 months ago of using insider information
provided
by then-FBI agent Jeffrey Royer to spread negative publicity about
public
companies through his online newsletter AnthonyPacific.com. Elgindy
then
engaged in short-selling stock in those companies - essentially betting
that
their share prices would go down after the negative information was
released.
In addition to short-selling stocks on inside information, he was
convicted
of extorting payments from some companies to buy his silence.
Elgindy, who pleaded guilty to bail-jumping and using a false ID, has
steadfastly denied doing anything else illegal.
"The prosecutors have portrayed me as a bad man who sought to hurt
average
people, and it is so sad because nothing could be further from the
truth,"
Elgindy wrote to Dearie in March.
In yesterday's hearing, he asked Dearie for leniency, but Dearie was
not
impressed.
"As intently as I listened, I heard not one word of genuine remorse,"
Dearie
responded. "I was so disappointed."
Elgindy began investing in stocks in 1988, after briefly attending USC
and
San Diego State University.
Elgindy's career path took a turn in 1995, when the firm where he was
working - Armstrong McKinley & Associates - became the target of a
federal
sweep of San Diego stock brokerages.
To avoid trial, Elgindy spent 16 months as an FBI informant, wearing a
wire
in conversations with his then-employer, Melvin Lloyd Richards, and
co-workers who were making money by peddling worthless stocks through a
network of boiler-room brokerages.
Elgindy's testimony was key to the government's conviction of Richards
and
several of his confederates. Assistant U.S. Attorney Jasmine Saide
wrote
that "the government could not have made its cases" without his help.
After the Richards case, Elgindy began ferreting out scam stocks and
exposing them with his now-defunct blogs, Dear Anthony, AnthonyPacific
and
InsideTruth.
Elgindy made millions of dollars by identifying overpriced stocks and
short-selling their shares.
"My trading, my timing, my skills at dissecting financial and news
announcements for hidden clues and fraud are all blessings that I
cherished
and guarded," Elgindy said in his letter to the judge.
Elgindy and his fellow bloggers bought stock in the companies and then
slammed the companies on blogs and e-mails in often scatological terms,
poking holes in their financial statements and news releases.
As the stock prices fell, Elgindy and other short-sellers reaped the
benefits.
Elgindy made enough money to buy a $2.2 million estate in the Encinitas
hills as well as a collection of cars that included a Humvee, Ferrari,
Bentley and Jaguar.
In the criminal court case, prosecutors acknowledged that most of the
companies that Elgindy attacked were scam operations. But they said he
improperly manipulated their prices and that he used confidential
information in his blogs, obtained from Royer, the FBI agent.
Elgindy, however, continues to deny that he made any money based on
information that Royer gave him.
Royer was found guilty of conspiracy, securities fraud and obstruction
of
justice in January 2005 and is scheduled to be sentenced July 28.
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Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com
By Dean Calbreath
STAFF WRITER
June 20, 2006
Encinitas short-seller Anthony Elgindy was sentenced to more than 11
years
in jail yesterday for manipulating stocks of small companies he was
investing in.
Elgindy, who was found guilty in federal court in New York in January
2005
of securities and wire fraud, conspiracy and extortion, also was
ordered to
forfeit $1.5 million.
Advertisement
Eric Tirschwell, Elgindy's lead attorney, declined to comment on the
sentencing but said his firm had told U.S. District Judge Raymond
Dearie
that it intended to appeal.
Elgindy has been in jail since April 2004, when he tried to use fake
identification to board a flight to San Diego from New York - a flight
that
would have violated his bail agreement.
His two years behind bars will count as time served, shaving off time
from
yesterday's 135-month sentence.
Elgindy was found guilty 17 months ago of using insider information
provided
by then-FBI agent Jeffrey Royer to spread negative publicity about
public
companies through his online newsletter AnthonyPacific.com. Elgindy
then
engaged in short-selling stock in those companies - essentially betting
that
their share prices would go down after the negative information was
released.
In addition to short-selling stocks on inside information, he was
convicted
of extorting payments from some companies to buy his silence.
Elgindy, who pleaded guilty to bail-jumping and using a false ID, has
steadfastly denied doing anything else illegal.
"The prosecutors have portrayed me as a bad man who sought to hurt
average
people, and it is so sad because nothing could be further from the
truth,"
Elgindy wrote to Dearie in March.
In yesterday's hearing, he asked Dearie for leniency, but Dearie was
not
impressed.
"As intently as I listened, I heard not one word of genuine remorse,"
Dearie
responded. "I was so disappointed."
Elgindy began investing in stocks in 1988, after briefly attending USC
and
San Diego State University.
Elgindy's career path took a turn in 1995, when the firm where he was
working - Armstrong McKinley & Associates - became the target of a
federal
sweep of San Diego stock brokerages.
To avoid trial, Elgindy spent 16 months as an FBI informant, wearing a
wire
in conversations with his then-employer, Melvin Lloyd Richards, and
co-workers who were making money by peddling worthless stocks through a
network of boiler-room brokerages.
Elgindy's testimony was key to the government's conviction of Richards
and
several of his confederates. Assistant U.S. Attorney Jasmine Saide
wrote
that "the government could not have made its cases" without his help.
After the Richards case, Elgindy began ferreting out scam stocks and
exposing them with his now-defunct blogs, Dear Anthony, AnthonyPacific
and
InsideTruth.
Elgindy made millions of dollars by identifying overpriced stocks and
short-selling their shares.
"My trading, my timing, my skills at dissecting financial and news
announcements for hidden clues and fraud are all blessings that I
cherished
and guarded," Elgindy said in his letter to the judge.
Elgindy and his fellow bloggers bought stock in the companies and then
slammed the companies on blogs and e-mails in often scatological terms,
poking holes in their financial statements and news releases.
As the stock prices fell, Elgindy and other short-sellers reaped the
benefits.
Elgindy made enough money to buy a $2.2 million estate in the Encinitas
hills as well as a collection of cars that included a Humvee, Ferrari,
Bentley and Jaguar.
In the criminal court case, prosecutors acknowledged that most of the
companies that Elgindy attacked were scam operations. But they said he
improperly manipulated their prices and that he used confidential
information in his blogs, obtained from Royer, the FBI agent.
Elgindy, however, continues to deny that he made any money based on
information that Royer gave him.
Royer was found guilty of conspiracy, securities fraud and obstruction
of
justice in January 2005 and is scheduled to be sentenced July 28.
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Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com