Investment Manager Named in Indictment

Dallas investment manager Jonathan Daws was accused Monday of helping short-seller Amr “Tony” Elgindy manipulate stock prices of companies under federal investigation.

A new indictment from a New York grand jury says Daws conspired with San Diego-based Elgindy and three other people. Prosecutors last year accused Elgindy and the others of shorting stocks using insider information, supplied by former FBI agents, about companies under investigation.

Short sellers seek to gain by borrowing stock and selling it. They hope to profit by repaying the loaned shares later with stock bought at lower prices.

Elgindy, Daws and others “used confidential law enforcement and regulatory information to make decisions whether to buy, hold, or sell the stocks,” the indictment says.

Elgindy, Jeffrey Royer and Lynn Wingate were arrested last year and accused of spreading negative publicity about the companies on the Internet, and profiting by selling their stock short. Elgindy, who has pleaded not guilty, faces trial in January.

In the latest indictment, the defendants are charged with insider trading, stock-price manipulation and extortion.

Daws couldn’t be reached for comment at his Dallas office.