FBI Approached Accused Insider-Trader For Help

Jan 10 2011 | 1:03pm ET

The California woman who last month became the seventh person arrested in the Justice Department’s massive insider-trading investigation only felt the cuffs after refusing to cooperate.

Winifred Jiau, in her first jailhouse interview, told Reuters that the Federal Bureau of Investigation approached her about assisting in the investigation before she was arrested last month. Despite the fact that the former Primary Global Research consultant has now been charged, she would not rule out cooperating with the probe.

“Initially, the FBI just wanted me to be a cooperating witness,” she said shortly after her arrest. But she offered no details about what the FBI wanted or why she declined to help, saying only that she has “not decided” whether to cooperate.

The FBI declined to comment on whether Jiau was so approached.

Jiau compared her situation to that of John Kinnucan, the research analyst also approached last year by the FBI. Kinnucan famously refused to help and sent a widely-publicized e-mail to his clients—including several prominent hedge funds—telling them so. Kinnucan has not been arrested or accused of wrongoing.

Like the other defendants in the case, Jiau will likely be sent to New York to face the charges against her. She has been charged with conspiracy and securities fraud for allegedly passing confidential information to three hedge funds. She faces up to 25 years in prison.

But Jiau told Reuters she has had trouble finding a lawyer in New York. “I really need a counsel,” she said. Unlike her fellow defendants, Jiau was denied bail; a federal judge in San Francisco ruled that the dual U.S.-Taiwanese citizen is a flight risk.

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