NEW YORK (CNN/Money) -
Stock trader Anthony Elgindy was convicted on Monday of using secret government information to profit in the market, while former FBI agent Jeffrey Royer was convicted of tipping him off about companies facing criminal investigations.
Each man faces the possibility of 20 years in prison for their convictions, which came in U.S. District Court in Brooklyn after a three-month trial, according to Reuters.
The Wall Street Journal said Elgindy, who ran a subscription-based investing Web site, was found guilty of 11 counts, including five counts of securities fraud, a count of racketeering conspiracy, a count of securities fraud conspiracy, a count of extortion, a count of extortion conspiracy, and two counts of wire fraud.
Elgindy sobbed and rocked back and forth in his seat as the jury pronounced him guilty of racketeering, including securities fraud and extortion charges, Reuters reported.
Royer was found guilty of nine of 14 counts against him, including four counts of securities fraud, a count of securities fraud conspiracy, a count of racketeering conspiracy, a count of obstruction of justice conspiracy, a count of obstruction of justice and a count of witness tampering, according to the article.
The government argued the two men were part of an effort to dig up negative news about corporations and then use that news to drive down share prices and profit by short-selling the stocks.
Prosecutors said Elgindy would use information from Royer to sell companies' stock short and advise subscribers to his Web site to do the same. Access to information about government investigations that could cause a stock price to fall would be an unfair trading advantage.
They said Elgindy portrayed himself as a crusader against companies that were defrauding investors and said he made millions of dollars from subscribers, who paid up to $600 a month to access his Web site, anthonypacific.com.
"Under the guise of protecting investors from fraud, Royer and Elgindy used the FBI's crime fighting tools and resources actually to defraud the public and to insulate themselves from detection and prosecution," said Roslynn Mauskopf, U.S. Attorney for the Eastern District of New York, in a statement.
"Royer violated the trust of the FBI by brazenly partnering with Elgindy to commit a laundry-list of crimes."
A sentencing date was not set.
Other defendants in the case included Lynn Wingate, Troy Peters and Jonathan Daws. They will be tried separately, according to the Journal, and three other defendants, Derrick Cleveland, Robert Hansen and Kent Terrell, have pleaded guilty and are cooperating with the government.