Kinnucan Arrested, Refused To Wear A Wire In Insider Case

Feb 17 2012 | 1:26am ET

A year-and-a-half ago, expert network founder John Kinnucan refused the Federal Bureau Investigation's offer to cooperate in the Justice Department's massive insider-trading probe. Last night, he paid a price for it.

Kinnucan was arrested yesterday afternoon at his home in Portland, Ore. The charges against him are currently sealed, although prosecutors have linked him to three people charged in the insider-trading case surrounding expert network Primary Global Research. The government has said it has wiretaps of conversations between Kinnucan and former SAC Capital Advisors trader Donald Longueuil and Level Global Investors co-founder Anthony Chiasson. In addition, Walter Shimoon, a former consultant for both Primary Global and Kinnucan's Broadband Research, told a judge that he had given Kinnucan material, non-public information.

Longueuil and Shimoon have pleaded guilty in the case; Chiasson was arrested last month and pleaded not guilty to insider-trading charges this week.

At least 10 FBI agents showed up at Kinnucan's home at 4:19 p.m. yesterday, taking him away a few minutes later. He spent last night at the Multnomah County Jail and will make his first appearance before a judge today before likely being sent to New York to face the charges against him.

Kinnucan gained some measure of fame in October 2010 when he e-mailed about 50 clients to inform them that the FBI had approached him about cooperating and that he had refused. Among the recipients were employees of hedge funds Coatue Management, Citadel Investment Group, Maverick Capital and SAC.

Both Kinnucan and SAC have been subpoenaed about their relationship with one another. In addition, Kinnucan said that the FBI sought his help in obtaining evidence against Regnan Rajaratnam, the brother of Galleon Group founder and convicted insider-trader Raj Rajaratnam. Kinnucan has said that neither Galleon nor Regnan Rajaratnam's hedge fund, Sedna Capital Management, were clients.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR