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Where are they now? Catch up with notorious Wall Street fraudsters

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Wall Street has been a constant battleground between the forces of greed and fear. However, every once in a while the greed takes over.

This can lead to fraud on the Street. Some of the most notorious financial crimes of all time have ties to the corner of Wall and Broad, and their impact — on victims, law enforcement, and future would-be crooks — lasts to this day.

Let’s meet some Wall Street’s most egregious fraudsters.

“Bring it on baby!”

Financial markets are dominated by information. Some people will even go to extreme lengths to find hot stock tips.

Raj Rajaratnam, the founder and manager of Galleon Group hedge fund management was able to outperform the market in the technology stocks area he and his team specialized in. Galleon soared to $7 billion and Rajaratnam became a wealthy investor.

Why did Rajaratnam become so connected to tech secrets? CNBC’s “The Next Generation” 2012 Episode reveals the details.American Greed“He had a dark secret. He was connected to a group of corporate insiders, who provided him with information on their companies prior to it reaching the stock exchange. Federal insider trading laws make it illegal.

I believe he felt power and that he could access information no one else had. He was able, and profited from it”, said Joshua Klein, former assistant U.S. Attorney, who is now a partner in Petrillo, Klein and Boxer, New York, during an interview for “American Greed.”

The big break in the case came when investigators managed to get a warrant to wiretap Rajaratnam’s phones — a tactic never before employed in an insider trading investigation. Rajaratnam and his defense team tried to silence the recordings in court, but were defeated.

When prosecutors played the recordings at Rajaratnam’s 2011 criminal trial, it lifted the veil on a corner of Wall Street not previously seen — or heard — by the general public. Rajaratnam could even be heard taking calls from employees of the company. Goldman Sachs board memberHe provided him market-moving data that the public could only later learn.

Rajaratnam & Danielle Chiesi had a lively conversation in court about secret information they obtained from some of the world’s top technology companies.

Rajaratnam admits, “I have to defer to your on IBM.”

“And Akamai too?” Chiesi responds.

“Akamai, too,” Rajaratnam says. “But AMD? “But AMD?

Rajaratnam was convicted by a federal jury in Manhattan on 14 charges, including conspiracy to commit securities fraud and securities fraud. He was sentenced by a judge to 11 years prison. Federal appeals court sustained the sentence, rejecting an appeal based on wiretaps.

Rajaratnam, who was freed in prison and sent to home confinement after completing his sentence in April 2020, still claims his innocence. He also accuses the then U.S. Attorney Preet Bhaara and his staff of illegally profiting from “murky” insider trade laws.

Rajaratnam is the author of a book, whose title makes it clear where he stands.

His first interviewSeit seiner 2009 Arrest Rajaratnam told CNBC’s Andrew Ross SorkinHe stated earlier in the month that his achievements were not due to illegal insider trade, but market research.

He stated that they spent about 10-12 hours each day conducting deep research. The Mosaic Theory of Wall Street is a theory that you connect small dots of information. This is perfectly legal.

Chiesi was sentenced for 30 months. He was freed from prison in 2013. lists herself on LinkedInA “military Philanthropist”, who aids servicewomen to return to civilian life.

“Mad Max” of Wall Street

Amr Ibrahim Elgindy (California stock trader) was making money with a different type of information many years before Rajaratnam and his Wall Street trades. His claim was that he could spot fraud and expose their shadiness, reforming markets. Elgindy claimed that stocks he selected plunged every time he heard of an investigation by the government or a trading stop.

Elgindy’s slick, flashy, and dazzling style earned him the nickname, “Mad Max” of Wall Street. This was featured in an episode of American Greed, 2010.

Market players were eager to join the fun in the wild day trading era of late 1990s/early 2000s. They paid up to $600 per month to access his web site, newsletters, and chat rooms. There, they could get the first word on so-called “fraud alerts” issued by Elgindy — who went by the online moniker Anthony@Pacific — and join him in shorting the stocks, betting they would go down. When the stocks did indeed plunge — sometimes all the way to zero—Elgindy and his followers made a fortune.

There were however a few facts that his subscribers weren’t aware of.

Elgindy was capable of spot numerous companies before they fell foul of the law, not through canny financial analyses, but due to Jeffrey Royer (crooked FBI agent).

According to their federal indictment of 2002, Elgindy alerted Royer about suspicious companies. Royer would then dutifully begin asking questions in his official capacity. Word of an FBI investigation was poison to a stock — especially a small cap, thinly traded one. The word spread quickly to Elgindy’s supporters and the rest the market. Elgindy would shout it and it was a sure sign that their short-selling efforts paid off.

Royer, as per the indictment took his operation one more step by accessing secret FBI databases and learning about other investigations. He then tipped Elgindy off, and the quick-selling frenzy was in full swing. The Mad Max of Wall Street couldn’t take it all.

Prosecutors claimed that Elgindy often extorted company insiders for shares or stock. This was in return for his followers selling short. That way, he could make money on the stocks again on the way back up — a reverse version of the classic Wall Street pump-and-dump scam.

Elgindy was convicted by a Brooklyn federal jury on numerous felony charges, including securities fraud and racketeering conspiracy.

Elgindy received a sentence of eleven years imprisonment and was freed in 2013. At 47, he died. Royer, who was sentenced at six years imprisonment was released from prison in 2012. According to U.S. Bureau of Prisons records Royer was released in 2012.

The stockbroker dressed as a wolf.

When it comes to the excesses that give Wall Street a bad name — the money, the parties, the drugs, you name it — there are few parallels to Jordan Belfort. The self-described “Wolf on Wall Street”, he wrote about his debauchery and sex in the 2007 book. Martin Scorsese, a filmmaker turned the story into a smash movie with Leonardo DiCaprio portraying Belfort. He was nominated for an Oscar.

Wall Street believed I had an undisguised death wish, and I wanted to commit suicide before my thirtyth birthday. Belfort stated that I was aware of the nonsense because I was just thirty-one years old and still alive.

Jordan Belfort

Jono Searle | Newspix | Getty Images

Belfort was not content with just climbing the Wall Street ladder in the 1980s, and he founded Stratton Oakmont. This bucket shop located on Long Island turned pump-and-dump fraud into an art form.

Belfort’s young men and their team specialized on what was then called over-the counter stocks. They were small companies not big enough for major stock exchanges, but small enough that they could avoid regulatory scrutiny. The Stratton Oakmont sales team pushed stocks relentlessly on investors. They drove up prices to an unsustainable level before selling shares to investors. Investors laughed and partied all the way to their bank accounts.

Belfort was sentenced to 22 months imprisonment after pleading guilty in 1999 to 10 felonies, including market manipulation, conspiracy and money laundering.

These days, he is still making money off of his wolfy past, offering online courses on sales and persuasion— the full course selling for $3,999, which his web site advertises as a “50% discount.” He offers paid speeches and seminars, and bills himself as “investment Guru”, “the world’s top sales trainer,” “entrepreneurship expert”.

The media is also welcome to discuss the financial hot topics, such as Bitcoin. predicted on CNBC would “go bust within a year” — in 2018.

Belfort’s Stratton Oakmont clients have claimed that they still suffer from victimization. A number of victims spoke out with American Greed in 2015 shortly after the release of the “The Wolf of Wall Street” home video.

Bob Shearin, a Californian who lost $130,000, stated that too many people think they’ve seen the movie.

According to court records, Belfort repeatedly refused to be forced to repay more than $110 million to the victims. After a 2018 federal court ruling, Belfort was ordered to give up his entire share in a company that provides wellness services. documents showed he had only paid $12.8 million in restitution.

Belfort, his co-founder, was implicated in a Malaysian money laundering scheme. In a bizarre twist to an already insane story, Belfort sued Red Granite Pictures for $300 Million in 2020. Belfort claimed the studio executive “tainted his story,” an ironic claim made by an admitted fraudster. In a court filing, the studio stated that Belfort’s suit had been “as morally corrupt as he is”.

Belfort settled the case months later and submitted his claims to arbitration.

All the greed fit for printing

Sometimes it is best to look beyond the headlines to gain an advantage in stock market. Eugene Plotkin, David Pajcin’s friend and colleague, took the concept literally in 2004/2005. The story is told in “American Greed” 2009 episode.

BusinessWeek Magazine’s “Inside Wall Street” column was immensely influential in the 2000s. Even though the internet had taken over, financial magazines still existed in print. Every week serious investors waited to receive their print edition of the magazine, and then they could pounce on the stock that the column was discussing.

Pajcin & Plotkin wondered if it would be great if they were able to see each week’s column first. Since McGraw-Hill at the time was BusinessWeek’s publisher, this would have been much more difficult than it seems. This is because McGraw-Hill used stringent security measures to ensure that the contents of Inside Wall Street were not published after the market closes on Thursdays.

The entire process was successful, even though only a few people were aware of what the column contained before it went out. However, there is one problem: greed.

Court documents show that Pajcin & Plotkin paid two employees of BusinessWeek for advance knowledge about what the column contained so they could trade those stocks. According to prosecutors, they managed to outperform the market in 20 stock over nine months between 2004 and 2005. The scheme was not over.

Pajcin, Plotkin found another crooked employee in Merrill Lynch’s mergers and acquisitions division who gave them information about possible deals. They were also tipped off by a grand juror during an investigation into a chief executive of a pharmaceutical company.

U.S. officials finally stopped the operation by tracing $2 million of trading proceeds from the accounts of Sonja Anticevic (a retired seamstress for underwear in Croatia), who also happened to be David Pajcin’s aunt.

Six individuals pleaded guilty in a criminal operation which netted $7 million more than it was worth to six other people. Pajcin who was the first to flip was sentenced and received time served. Plotkin received nearly five-year sentences and was freed in 2011.

Thirteen people were ordered to pay civil penalties to the Securities and Exchange Commission, including Aunt Sonja the seamstress — proving that even the most ingenious insider trading schemes are often full of holes.

Meet more of the world’s most brazen thieves on the ALL-NEW season premiere of CNBC’s longest-running prime time original series, “American Greed,” on a new night — Wednesday, January 5 at 10 p.m. ET. The truth is that some people will do almost anything to make money in 15 stunning seasons.

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