Sunday, 28 August 2016
Last updated 1 day ago
Feb 21 2012 | 1:27am ET
Another expert-network consultant has pleaded guilty to providing Broadband Research's John Kinnucan with confidential corporate information, while a hedge fund said that a former portfolio manager got illegal information from him.
Donald Barnetson, a former marketing executive at SanDisk Corp., told a federal judge that he passed Kinnucan tips that the expert-networker then shared with clients.
"I conspired with a consultant to provide confidential information with regard to my employer at the time," Barnetson said. Prosecutors allege he passed tips about SanDisk's anticipated revenue and about negotiations between the company and Apple Inc. over a legal dispute. In return, Kinnucan allegedly invested $25,000 in a business launched by Barnetson and offered the latter tips about other companies.
Barnetson is cooperating with prosecutors and was released on $50,000 bail. He faces up to five years in prison on the conspiracy charge.
Barnetson is the second former Broadband consultant to claim he passed Kinnucan inside information. Walter Shimoon pleaded guilty to passing tips about his former employer, Flextronics International.
Separately, Carlson Capital said Friday that a former portfolio manager had received confidential tips from Kinnucan. The Dallas-based firm said that it was not a target of the investigation and that it was cooperating with the government.
Carlson said that the former employee, who allegedly received and traded on a tip about F5 Networks in July 2010, had left the firm in March of last year. The hedge fund did not identify him, but Reuters reports that it was Dan Grossman. Grossman worked at Level Global Investors, whose co-founder was charged with insider-trading last month, before joining Carlson.
Grossman has not been charged with any wrongdoing.
Kinnucan was arrested on Thursday at his home in Portland, Ore., and charged with four counts of conspiracy and securities fraud. He had earlier gained some measure of fame when he e-mailed about 50 clients to inform them that the Federal Bureau of Investigation 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 Capital Advisors.
Kinnucan made his first court appearance in Portland on Friday and was ordered held in custody pending a hearing tomorrow.