Anthony Elgindy, a well-known figure in the Internet world of penny stocks, was convicted yesterday on charges that he used confidential information from an F.B.I. agent about criminal investigations to profit illegally in the market.
The former agent who supplied the information, Jeffrey A. Royer, was also found guilty of securities fraud conspiracy charges related to Mr. Elgindy's stock-selling scheme. The federal grand jury in Brooklyn had deliberated for four days after a 10-week trial.
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Prosecutors also said that Mr. Elgindy and his associates threatened to disclose bad news about several small companies unless they were given free or deeply discounted stock.
"Under the guise of protecting investors from fraud, Royer and Elgindy used the F.B.I.'s crime-fighting tools and resources actually to defraud the public, and to insulate themselves from detection and prosecution," Roslynn R. Mauskopf, the United States attorney in Brooklyn, said in a statement.
When the first guilty verdict was read, Mr. Elgindy, 36, placed his head in his hand and rocked back and forth, sobbing and moaning. Judge Raymond J. Dearie then stopped the proceedings so that Mr. Elgindy could be excused from the courtroom.
http://nytimes.com/2005/01/25/business/25fraud.html?hp&ex=1106629200&en=410b3c483aa5897b&ei=5094&partner=homepage
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