Short Seller Elgindy May Have Known Of Sep 11 -Prosecutor
SAN DIEGO (AP)--An Egyptian-born financial analyst charged in a
nationwide stock swindle may have known about the Sept. 11 terrorist
attacks and tried to profit from them, a federal prosecutor said
Friday.
Amr I. "Tony" Elgindy telephoned his broker Sept. 10 and asked him
to liquidate his children's $300,000 trust account, Assistant U.S.
Attorney Ken Breen told a federal judge at Elgindy's detention
hearing.
"He made a comment predicting the market would drop to 3,000" at a
time when the Dow Jones stock index was at 9,600, Breen said. "Perhaps
Mr. Elgindy had pre-knowledge of the Sept. 11 attacks. Instead of
trying to report it, he tried to profit from it."
Elgindy, 34, of Encinitas, was ordered held without bond on charges
of racketeering, extortion and obstruction of justice. Before issuing
the order, Magistrate Judge John Houston said he was going to
"disregard" the suggestion that Elgindy had anything to do with the
terror attacks.
Elgindy, wearing a tan jumpsuit, didn't speak during the hourlong
hearing.
His attorney, Jeanne Knight, said Elgindy did call his broker to
make a trade, but the timing was coincidental and the market had been
dropping for months.
"It seems like the government, for lack of factual evidence, has
decided to smear my client with terrorist innuendoes," Knight said.
"This is smacking of racial profiling."
Breen made his accusations as prosecutors tried to convince Houston
that Elgindy was a flight risk and should be denied bail.
Elgindy, one of five defendants in the case, was arrested May 22 on
an indictment issued by a grand jury in New York.
In exchange for money, two FBI agents used confidential databases to
provide Elgindy and other co-conspirators with information on publicly
traded companies, the indictment said.
Elgindy allegedly spread negative information about the companies on
his Web site and to subscribers of his e-mail newsletter,
InsideTruth.com, while betting that the companies' stock would go
down.
In one case, a former FBI agent searched the agency's confidential
National Crime Information Center database and discovered the criminal
history of a top executive for a company called Nuclear Solutions, the
indictment said. The same day, Elgindy began sending e-mail calling
the executive "a convicted felon," then sold the company's stock
short, the papers said.
Earlier this week, FBI agents raided Elgindy's $2.2 million mansion.
Inside, agents said, they found tens of thousands of dollars in cash
and gold coins. The government is seeking to seize Elgindy's fleet of
cars, including a Rolls Royce, a Jaguar and a Humvee.
If convicted of all counts, Elgindy faces a maximum 65 years in
prison.
(END) DOW JONES NEWS 05-24-02
03:58 PM
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