Short-Seller Anthony Elgindy Arrested By FBI In San Diego

NEW YORK (Dow Jones)--Anthony Elgindy, the controversial short-seller and online stock commentator, has been arrested on charges of racketeering, insider trading and market manipulation, a government spokeswoman said Wednesday.

Jan Caldwell, a spokeswoman for the San Diego field office of the Federal Bureau of Investigation, said Elgindy, who lives in the San Diego area, was arrested at his business Tuesday.

Details of the charges against Elgindy weren't immediately available. A spokeswoman for the U.S. Attorney's office in Brooklyn, N.Y., fr

om which the charges originate, said the office would issue a statement about the Elgindy case soon.

The point is (should you care to read what was written) owners do not lend their stocks; it is taken from margin buyers by brokers and "lent" to shorts who pay the brokers NOT the Owners for the "loan."

1. It is not just margin buyers. 2. If that is a condition when you buy on margin, so be it. Don't buy stocks on margin if you don't like it.

It is manipulation on a huge scale and is not legal in many advanced countries.

It is no more "manipulation" then a guy who borrows money to buy a stock. In many countries there is no down-tick rule as well.

The stock manipulators had this practice legalized in the 30s when racketeer Joe Kennedy was in charge of the SEC.

Good for them. The market is not a cheer-leading session. Short-sellers cannot drive down the price of a stock due to the down-tick rule.

By artifically increasing the supply of stocks for sale thru these thefts the interests of the true investors and owners are undermined.

They are not artificially increasing the supply of stocks for sale any more than they are artificially increaseing the amount to be bought. Every stock sold short must be bought later.

If you think a stock price will fall buy puts but, of course, this does not artifically increase the supply of stock for sale and automatically drive stock prices down as does manipulation. So these parasites won't do that.

There is a down-tick rule. Short sellers can not drive the price of a stock down.

What I am is a guy who can actually cut throught the bilge and describe what is really happening.

Who knows little about how the market works, and is bitter from having gotten nailed in an over-priced POS and is unhappy that some shorts made money on the way down.

Only a small percentage, if any, of stock owners would consciously lend their stocks to those determined to drive down their value.

Then they shouldn't lend them, or shouldn't buy on margin.

There are a few of these idiots but the vast majority comes from manipulation of margin buyers' stocks without their knowledge.

Besides, most of the stocks lent do not come from small investors on margin. Most of the stocks held in this country are held by retirement plans, large trusts, etc. These people knowingly lend their stock because they want the interest on the loan. If they are confident in the underlying business, then there is nothing to fear from the shorts.

"Rational" prices my ass. How does disemboweling investors increase their willingness to invest? Shorting reduces capital formation because it increases the uncertainty faced by new companies or companies undergoing rough periods.

The purpose of the stock market is to price and trade capital. It does not do the country any good because a bunch of people pump a worthless piece of crap stock, thus putting asset prices out of whack.

It is very destructive of capitalistic principles. No one productive benefits from this insidious and little understood practice only the parasites sucking off the life blood of the capitalistic system.

Everyone in the country benefits when asset prices are accurately reflected. That is how the economy knows where to direct resources.

Apparently you are unaware of where this stock comes from preferring to believe the media idiots descriptions of the practice.

Having worked in the business for many years, I know exactly how it works. You are simply clueless about the stock market. It does not exist so that you can buy a stock with a cool name at 300 times earnings and get rich for doing nothing. It is obvious that you have gotten burned in over-priced piece of crap companies, and have decided to blame the evil bogey-man shorts. Ultimately, asset prices will reflect what they are worth. If you buy a company worth nothing, it will eventually go to zero in price. I am sorry that you didn't get out before you got creamed, but it is nobody's fault but your own.

Don't try to tell me that the only stocks shorted are those from over-hyped fly-by nights that is a lie.

Don't try to tell me that increasing the supply of stock sold by "borrowing" it from its owners does not tend to force the price down or try the duplicitous line about there being a buyer for the increased supply because clearly the equilibrium price will be lower than it would have been without the extra shares put on the market by the parasites. Even basic economics refutes that b.s.

Short sellers spread false information to drive down companies stocks to their (and to everyone elses' disadvantage) advantage.

The uptick rule has little if any long term impact on short sellers strategies and minimally on their tactics.

The absence of short sellers in the German market has not allowed asset prices to get out of line so some how it is able to survive without the good offices of Dracula's henchmen. How could that be?

Borrowing to purchase stocks is in no way similiar to the parasitic torpedoing of capital formation requisite to these bloodsuckers' success.

The only stock I know for a fact that the shorts cut out from under me was Quarterdeck a few years ago. There was no good reason for its stock price to fall until the daily volume of short sales escalated dramatically. Are these assaults co-ordinated by groups of shorts? Do they decide to attack a certain company then swing into action against it in a feeding frenzy slashing its value by repeated sales? Yes and yes.

If insurance and pension companies are providing the material for shorting they should be in court immediately for violating their fiduciary responsibilities to their clients. But I doubt if that is the case for a few percentage points in interest. There could be other fraudulent reasons for doing so but none for sound financial reasons. They can make far more by selling covered calls against their position without undermining their portfolio.

If you profit from this economic bloodletting I can understand your defensiveness but it will take far more theoretic firepower than you have brought to bear to obscure the basic nature of this irrational and immoral procedure. The stick-up man profits from his activities too but don't expect me to look the other way from his thievery.

In reply to your response:

I wrote:
One part of Elgindy's scam was to short Applied Digital Solutions (ADSXE) (the implantable microchip company). He managed to reduce their market cap by over 100 million in one day.

You responded
That is simply impossible. You can not short on a down-tick, therefore, short-sellers can not drive a stock price down by selling.

My response to you:
One of of Elgindys methods was “Short & Distort”, whereby both he and those who followed his advice would short an equity and them spam numerous online message boards with half truths and other misrepresentations of facts in order to scare weak hands out of their shares, thus causing a panic sale and subsequent share price reduction. It can be executed quite well in bear markets.

His coconspirators in the FBI were providing him with information he was then able to utilize to his advantage.

Now, according to my understanding of how to affect a short sale, your statement about not being able to short on a down tick is correct, but irrelevant!

If you’ve ever read an intraday chart, you’ll see at least some form of a “saw tooth” pattern. Those “teeth” are formed by down ticks and up ticks. With a heavily traded stock, there are 100K’s if not millions of “teeth” every trading day.

And anyway, Elgindys short sale orders were quite likely placed prior to the time the distortion was being played out. Then after the price fell far enough, the short sales were covered.

By the way, I did make a mistake in understating the ADSXE market cap reduction. Their float at that date was approximately 265 million shares. Elgindys scam caused a price drop of well over $1.00 / share.

I can’t say where else Elgindy pulled this off. I just happen to have been following the affairs of Applied Digital Solutions due to their being the point man in this implantable GPS chip business.

Here's a weird bit of trivia. Another 'Anthony Elgindy.' How many Anthony Elgindys are there in San Diego?

- "Slain Civilian Had Lived in Oceanside," By Bruce V. Bigelow, Gregory Alan Gross and Jeff Ristine, SAN DIEGO UNION-TRIBUNE STAFF WRITERS via Signonsandiego.com, April 2, 2004

The Cleveland Plain DealerDonna Zovko of Willoughby, Ohio, held a photo of her 32-year-old son Jerry, one of four U.S. civilians killed during a shocking day of violence in Fallujah.

One of the civilian security guards ambushed and killed in Fallujah was a former Navy SEAL and fitness instructor who once lived in Oceanside. Friends, family and business associates mourned his death last night.

"It's just devastating," Anthony Elgindy, a friend, said by telephone yesterday. "Everybody is just, just beyond ... " His voice trailed off. "He wasn't there to engage in any fighting, although he only told me so much about it," Elgindy said. "He was there to maintain the peace and protect the civilians who are there."

Scott Helvenston, 38, was one of four U.S. civilian workers killed Wednesday in an ambush by insurgents. Their bodies were then burned and mutilated by a mob, horrifying events broadcast on television, newspapers and Web sites around the world.

He had been working as a security guard for Blackwater Security Consulting, a private contractor, outside the Iraqi city.

A neighbor in his Oceanside apartment building remembered him as athletic, full of energy and a devoted father to sons Kyle and Kelsey.

"He was always doing something with his children," Fred Atkinson said. "Camping, surfboarding ... "

When Helvenston mentioned he was going to Iraq, Atkinson said the ex-SEAL sounded as though he simply needed the work. "He said it would be a short stay," Atkinson said. "I didn't know what to tell him because he had already taken the job."

Helvenston left the Navy's Sea, Air, Land special commandos in 1994, but he never let up on the physical and mental discipline he learned as a member of the elite Navy fraternity, where he had been a SEAL instructor.

"I think it's somewhat defining of who I am as a person," Helvenston said some years ago of his SEAL experience. "But I never thought that much about it until I kept meeting people who'd say, 'Oh, wow, you were a Navy SEAL.' "

A pentathlete, Helvenston's life was constructed around fitness. He marketed a "total fitness" regimen and taught mock SEAL fitness classes. He trained actress Demi Moore for her role in the movie "G.I. Jane" and worked on several other movies, according to his fitness Web site. He was on the show "Combat Missions," a reality TV program broadcast by the USA Network in which paramilitary teams competed to accomplish various missions. He also did stunts and acted on other TV shows and commercials.

"Scott was a loudmouth" on the show ("Combat Missions"), Elgindy said, "but he's not really like that. That's what the show wanted him to be, like a Navy SEAL."

Helvenston's fitness business was called Amphibian Athletics, which stressed calisthenics training. "My goal is to teach as many people as possible that your body is your gym," he told The San Diego Union-Tribune in 1997. "As long as you have yourself, you will always have your gym." Helvenston was born in Florida and said on a Web site promoting his fitness videos, "I joined the Navy at age 16 after a difficult childhood (my father died when I was 7, and I had lived in 37 different foster homes)."

He described himself as among the youngest ever to graduate from SEAL training, based in Coronado. He told the Orlando Sentinel in an interview two years ago that he deployed four times to South and Central America, the Caribbean and the Mediterranean.

Helvenston told the newspaper that he met his wife, Tricia, in 1987. The Sentinel said he had a college degree in criminal justice from State University of New York. Elgindy said when Helvenston's marriage faltered, the two men became close friends.

When Helvenston told him he was going to Iraq, Elgindy said he told his sandy-haired friend to dye his hair black and grow a beard, "so you don't look so much like an American."

...

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