Prison Sentence for a Short-Seller
By Bloomberg News
June 20, 2006
A federal judge sentenced a former stock picker, Anthony Elgindy, to 11 years and 3 months in prison for using inside information to make short sales and extort money from companies he had criticized in an online newsletter.
Mr. Elgindy, 38, was convicted last year in federal court on 11 counts of racketeering conspiracy, securities fraud, wire fraud and extortion.
"As intently as I listened, I heard not one word of genuine remorse," Judge Raymond J. Dearie said after Mr. Elgindy requested leniency in Federal District Court in Brooklyn. "I was so disappointed."
Mr. Elgindy, who lived in Encinitas, Calif., used inside information supplied by Jeffrey Royer, then an F.B.I. agent, to spread negative publicity about companies through his online newsletter AnthonyPacific.com, the government said. In addition to short-selling on inside information, he was convicted of extorting payments from some companies to buy his silence.
Short-sellers seek to profit by betting on a decline in a stock's price. Mr. Elgindy's gains from trading shares of 32 companies using leaked information totaled $3.02 million. He made $1.61 million in Web fees, the government said.
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