I mentioned in my series on illegal short selling that it would be helpful to have a government official who could supply information or launch endless investigations. I found this article in the October 3, 2006 The Wall Street Journal interesting. It is on page C3 and has no byline.
"Former Federal Bureau of Investigation special agen Jeffrey Royer was sentenced to a six-year imprisonment for his role in a stock-manipulation case involving a handful of penny-stock companies.
Mr. Royer was also sentenced to three years of superised release.
He was found guilty of racketeering conspiracy and securities fraud in 2005 along with short-seller Anthony Elgindy. The government accused the two men of using confidential FBI information to depress the shares of companies that Mr. Elgindy and members of his online investment group sold short - or bet against using borrowed shares.
'Elgindy was the master manipulator,' said Judge Raymond Dearie of US Distric Court in Brooklyn. But 'without this chap and the information he sold, we would have no conspiracy.'
Mr. Elgindy was sentenced to more than 11 years in prison and ordered to forfeit $1.5 million in June."
I'm sure there are many more legs to this out there still operating.
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