Anthony Elgindy

Anthony Elgindy (November 28, 1967 – July 23, 2015), born Amr Ibrahim Elgindy [1] in Egypt, was the founder of Pacific Equity Investigations, and was best known as "Anthony@Pacific", the "Internet's most theatrical short-seller".[2]

Anthony Elgindy in 2010

Originally a car salesman in San Diego, Elgindy became a stock trader in 1988, working for penny stock brokerage Blinder Robinson. He later moved to another brokerage house, Armstrong McKinley. Soon afterward, when the firm came under investigation for taking bribes to recommend stock, he turned informer and helped get the firm shut down. He struck out on his own in 1995, becoming a short seller. He soon became known for exposing companies that he believed were engaging in unethical and illegal activity that inflated their stock.[3]

Elgindy became famous for posting his commentaries on short-selling message boards, and his reputation became such that he could send a stock into a tailspin with just one post. He launched Pacific Equity Investigations in 1999, using his earlier experience working in boiler rooms to expose fraud.[3]

After the turn of the century, 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 the stock. He was not above extorting executives into giving him stock in order to make him back off his attacks on them.[3]

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.[4] However, the SEC reversed the ban a year later on appeal.[5]

Before then, the FBI had begun investigating Elgindy after receiving a tip that he tried to lock in his profits just a day of the September 11 attacks–thus suggesting that he'd profited from advance knowledge of the attacks. They were unable to find any evidence he had done so, but did uncover his scheme to steal confidential law enforcement information. They questioned Broyer, who resigned rather than face further inquiry and began working directly for Elgindy. However, the scheme continued, with Broyer's girlfriend, FBI agent Lynn Wingate, continuing to funnel information to Elgindy.[3] Ultimately, in 2002, Elgindy, Broyer and Wingate were indicted for their roles in the scheme.[5]

In a superseding indictment issued in January 2005, Elgindy was charged with racketeering, securities fraud and other crimes in connection with his scheme to steal information about FBI and SEC investigations of various companies. After a four-month trial, during which Elgindy was accused of insider-trading involving 32 different stocks, including the stock of Genesis Intermedia, Inc. (GENI), Elgindy was convicted of "inside-trading" in five of those stocks with illegal gains totaling about $66,000.[6] He was sentenced to 11 years in federal prison, and released in late 2013 after serving almost seven years.

Elgindy committed suicide on July 23, 2015.[7]

Jeff Broyer, Lynn Wingate, and Jonathan Daws are also convicted for their participation in the scheme.[8]

The 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. 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.
  5. Carol Remond (March 11, 2004). "SEC Overrules NASD Fine, Ban Against Anthony Elgindy". The Wall Street Journal.
  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.
  8. "United States Attorney for the Eastern District of New York". Retrieved 12 July 2020.

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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