Anthony Elgindy

Anthony Elgindy (November 28, 1967 – July 23, 2015),[1] was an American stock broker, and financial commentator who founded Pacific Equity Investigations. Elgindy gained a reputation for his "investigations" of companies. Towards the end of his life, Elgindy was convicted of insider trading and served seven years in federal prison.

Anthony Elgindy in 2010

Born in Egypt as Amr Ibrahim Elgindy, Elgindy was known professionally as "Anthony@Pacific", the "Internet's most theatrical short-seller".[2]

Early career

Elgindy originally worked as a car salesman in San Diego. In 1988, he became a stock trader working for penny stock brokerage Blinder Robinson. He later moved to another brokerage house, Armstrong McKinley.

When Armstrong McKinley came under investigation for taking bribes to recommend stock, Elgindy provided incriminating information to prosecutors. In 1995, Elgindy became a short seller.

Exposing unethical companies

During the mid 1990s, he began publishing on short selling message boards. He soon became known for exposing companies that he believed were engaging in unethical and illegal activity that inflated their stock.[3] An adverse posting about a company from Elgindy could allegedly cause a company's stock to decline sharply. In 1999, He launched Pacific Equity Investigations in 1999, using his earlier experience working in boiler rooms to expose fraud.[3]

Law enforcement information scheme

After 2000, Elgindy began working with FBI agent Jeff Broyer. Elgindy gave Broyer the names of companies that he believed were engaging in illegal activity, and Broyer used FBI databases to search for any investigations into those companies by the FBI or the SEC. Broyer then funneled information on any pending investigations to Elgindy, who used that information to short sell the stock. He was not above extorting executives into giving him stock in order to make him back off his attacks on them.[3]

After the September 11 attacks, the FBI began investigating Elgindy after receiving a tip that he might have had foreknowledge of the attacks.. The investigation found no evidence of that.

However, the Elgindy investigation did uncover his relationship with Broyer. Broyer resigned and began working directly for Elgindy. Broyer's girlfriend, FBI agent Lynn Wingate, continuing to funnel information to Elgindy.[3] In 2002, Elgindy, Broyer and Wingate were indicted for their roles in the scheme.[4]

NASD investigation

In 2003, the National Association of Securities Dealers (NASD) ruled that Elgindy and his firm Key West Securities "engaged in a manipulative scheme in 1997 to inflate artificially the share price of Saf T Lok, Inc. through the entering of fraudulent quotations in the NASDAQ system, selling the stock short at the artificially high prices, and then taking active steps to depress the share price of Saf T Lok through the dissemination of negative research comments."

Elgindy and Key West Securities were fined $51,000 and had their NASD memberships revoked.[5] In 2004, the SEC reversed the ban on appeal.[4]

2005 indictment

In a superseding indictment issued in January 2005, Elgindy was charged with racketeering, securities fraud and other crimes. This included his scheme to steal information about FBI and separate SEC investigations of various companies. Elgindy was accused of insider-trading involving 32 different stocks, including the stock of Genesis Intermedia, Inc. (GENI),

After a four-month trial, Elgindy was convicted of "inside-trading" in five stocks with illegal gains totaling about $66,000.[6]

Aftermath

Elgindy was sentenced to 11 years in federal prison. He was released in late 2013 after serving almost seven years. Elgindy committed suicide on July 23, 2015.[7]

The Elgindy case was the subject of an episode of American Greed that aired in 2010 entitled "The Mad Max of Wall Street."

References
  1. Eric Dash (2004-11-01). "Broker Who Aided U.S. Going on Trial for Fraud". The New York Times.
  2. Joey Anuff and Gary Wolf (August 2000). "The Dumbass, The Daytrader, and the New Democracy". Wired.
  3. American Greed: The Mad Max Of Wall Street (Television Production). United States: CNBC. 2010.
  4. Carol Remond (March 11, 2004). "SEC Overrules NASD Fine, Ban Against Anthony Elgindy". The Wall Street Journal.
  5. NASD (2003). "NASD's NAC Bars Tony Elgindy and Expels Key West Securities, Inc. For Manipulative Short Selling Scheme". Archived from the original on 2007-02-10.
  6. "Archived copy". Archived from the original on 2011-07-17. Retrieved 2011-01-10.CS1 maint: archived copy as title (link)
  7. "Well-known market manipulator Anthony Elgindy is dead". Retrieved 2017-05-01.

Further reading
  • Linda Christiansen, "When Telling the Truth is a Crime, Elgindy Faces Charges that He Manipulated Stocks with Accurate Information," The Wall Street Journal, November 1, 2004
  • Conor Dougherty, The San Diego Union-Tribune, "SEC overturns ban on stock trader | Elgindy's firm also ordered reinstated," March 11, 2004
  • John R. Emshwiller, "A Felon's Wife Picks Up the Pieces Of Her Luxury Life," The Wall Street Journal, November 29, 2005
  • John R. Emshwiller, "Online Maverick Sells the Internet Short," The Wall Street Journal, July 22, 1999
  • John R. Emshwiller, Scam Dogs and Mo-Mo Mamas: Inside the Wild and Woolly World of Internet Stock Trading
  • Gary Wolf and Joey Anuff, "Dumb Money: Adventures of a Day Trader," Wired (Apr. 2004)
  • David Cohen, Chasing the Red, White, and Blue
  • Kowalski, Robert (2000). "This Silicon Investor Is Now Anthony@FederalDetention.gov". Retrieved 2007-04-30.
  • Weiss, Gary (2002). "What to Bet Against". Retrieved 2007-04-30.
  • Berenson, Alex (May 23, 2002). "Five, Including F.B.I. Agents, Are Named In a Conspiracy". The New York Times. Retrieved 2007-05-01.
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