the following text are Tony's words.
Bob Zumbrunnen aka SI Bob
Dear Folks,
On December 13, 2005, the United States Court of Appeals in Washington, D.C. handed down an historic decision without precedent. This was a decision that ultimately dealt with what was then a new and equally bizarre theory of stock manipulation. This theory was formulated just for me. The NASD, in their pursuit of permanently silencing me manufactured a theory that said it is possible to manipulate the price of a stock using accurate and truthful information. Armed with this novel idea, the NASD in 1997 went after me for manipulating shares in a tiny scam under the ticker symbol “Lock.”
In this case the NASD alleged that I manipulated LOCK shares by issuing negative and cleverly timed sell recommendations that contained truthful but extremely negative information. It was seemingly a ridiculous case, but the NASD was deadly serious about it, and we went all the way through the hearing process. I won. This didn't stop the NASD; they appealed the decision to their own NAC council, also known as the NASD kangaroo court. This time the NASD prevailed, and I was found guilty of manipulating shares of LOCK by using the truth. During this time, the prosecutors here in NY seized this opportunity to pursue me on a much wider scale in many, many more stocks. They used NASD v. Elgindy case as the only authority stating it’s possibly to manipulate a stock by using the truth. It is the exact theory and case precedent the US Attorney’s office used in Brooklyn at my criminal trial; there they also suggested that the truth could be manipulative.
My position on the other hand was and has always been that it is IMPOSSIBLE to manipulate shares of any stock regardless of circumstance, if one is using the truth, and or what is believed to be the truth.
In a Wall Street Journal article last year, this very issue was raised on the first day of my criminal trial, November 1, 2004. The story’s title:
“When telling the Truth is a Crime:
Elgindy faces charges he manipulated stocks with ACCURATE information”
“Courts have generally held that putting out accurate material wasn't manipulative….the prosecutors in the Elgindy case, however, are taking a more encompassing view of manipulative activity. In a letter last year to presiding Judge Raymond Dearie, the US Attorney’s office in Brooklyn said ‘the government’s case alleges the release of accurate information can indeed be part of a manipulative scheme.’”
It doesn't matter if I tell 1 person, 10 people, or 10 million people what I know or any part thereof. It doesn't matter if I tell 3rd graders first, your grandmother next, and the 7-11 guy last. It cannot be manipulation. It doesn't matter who I tell the information to, or when I communicate it. The government has not right to reign in my views or beliefs. They cannot tell me or you what we can or cannot do with truthful information in our possession, nor can they stop our pursuit of the truth.
A theory that has no basis in law was allowed to be presented to the jury. Because this theory of manipulation was so utterly wrong and it was this very theory relied on for the criminal charges, it has to be “Game-Over”. The verdicts weren't just based on bad law, they were based on no law at all and must be reversed.
My jury was allowed to consider this bogus manipulation theory and it is reflected in both the jury charge and the government’s summation. On page 8,119, line 12 -22 they state:
It's the comments of a coordinated short-selling attack scheme that's designed to artificially impact the market with sudden unnatural impacts. How the market was particularly affected depended upon how the information was released and the reaction of the public. If the longs panicked, and we heard about puking up stock, that would have one effect. Sometimes it wouldn't work.
I ask that you please read this a few times and think hard about what the prosecutor is saying here to the jury. He is saying that the way this manipulation worked is by the sudden introduction of information (arguably negative) and HOW it was released. If the stock went down, say for example after an Insidetruth.com report comes out, that is manipulation. A little farther along we see once again in their summation, on page 8,121, line 5-9:
the deceptive trading practice of a coordinated release of negative and sometimes false information, to have the effect to crush, destroy, ruin the stock price, and, when it's done in a collusive manner that happened here, that's improper, that's illegal, and that's what they did.
Not only in all of this in their summation completely false, it is completely devoid of any foundation whatsoever in the law. It is exactly what I have been fighting against for the past 8 years. Imagine being convicted of conduct that ends up being completely legal after all? The only person who alleged this conduct was illegal is the same person who on a so-called “terrorist” task force never prosecuted a single terrorist in his entire life; a man who knew and continues to know less than nothing about our capital markets; a man who has tried mightily to force a “short-sellers-square” into a “terrorist-circle.”
For the past three years the truth has been criminalized, but as of December 13, 2005, this is no more. It is finally over. The caustic words of the High Court’s decision hopefully will prevent these feeble minded lawyers at the NASD from seeking another public thrashing at the Supreme Court level. Eight long and expensive years battling the NASD and the parasites they spawned have exacted a heavy toll on myself and my family. My children continue to be ridiculed, taunted and humiliated on an almost daily basis because their father is in jail and a “terrorist”. The real terrorist is out there, walking free, having used my life as a spring-board into the private sector, doing exactly what he found so distasteful by Royer.
Knowing about, assisting and/or initiating FBI or SEC investigations is completely legal. Disseminating negative, even overwhelmingly negative, information about frauds or scam stocks is completely lawful conduct. Choosing to release all or parts of this information to specific people, groups or the general public is a legitimate choice that no one can take from me, especially the government.
If I make a trading call, write a report, or disclose truthful information and that translates into dozens, hundreds, or thousands of sell orders, the resulting explosion in orders or volume in NOT artificial or exaggerated "negative" sentiment. It is as real and bona-fide as negative sentiment can get, and thankfully it continues to be the law.
Peace, and happy holidays to all
Anthony |
