Tuesday, January 25, 2005

Elgindy and Former FBI Agent Royer Convicted

Anthony Elgindy and former FBI Agent Jeffrey Royer were convicted (Jan. 24) in the U.S. District Court for the Eastern District of New York (Brooklyn) of racketeering and securities fraud after a trial that started in early November.  Elgindy specialized in analyzing companies that he would recommend be sold "short" by investors, and the government accused Royer of leaking information to Elgindy about pending investigations of companies that could be used to short the shares or, in two instances, to extort the company to keep the information from being disclosed.  According to an article in the Wall Street Journal (Jan. 24):

Mr. Elgindy was downcast as he entered the courtroom, appearing nervous, with his eyes closed or focused on his lap. The jury found Mr. Elgindy guilty of 11 counts against him, including five counts of securities fraud, a count of racketeering conspiracy, a count of securities fraud conspiracy, a count of extortion, a count of extortion conspiracy, and two counts of wire fraud.

As the jury read the verdict, there were gasps and cries from the crowd and defense table, leading Judge Raymond Dearie to halt the proceedings so Mr. Elgindy could be taken from the courtroom.

Mr. Royer was found guilty of nine of 14 counts against him, including four counts of securities fraud, a count of securities fraud conspiracy, a count of racketeering conspiracy, a count of obstruction of justice conspiracy, a count of obstruction of justice and a count of witness tampering.

Royer testified (earlier post here) that he leaked the information to Elgindy to cultivate a source of information about corporate wrongdoing, a defense rejected by the jury.  The jury also rejected the defendants' venue defense (ealier post here).  (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/01/elgindy_and_for.html

Fraud, Prosecutions, Securities | Permalink

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