Sunday, 14 February 2016
Last updated 1 day ago
Feb 23 2012 | 5:04am ET
Despite a federal judge's ruling that he be released, expert-networker and accused insider-trader John Kinnucan remains in jail a week after he was arrested.
U.S. Magistrate Judge Janice Stewart in Portland, Ore., ordered Kinnucan released without bail yesterday afternoon. But, in spite of the onerous conditions she put on Kinnucan, Stewart was overruled hours later by a federal judge in New York, where the Broadband Research founder will face conspiracy and securities fraud charges.
U.S. District Judge Deborah Batts stayed Stewart's decision, ordering that Kinnucan remain in the Inverness Jail "until such time as this court has an opportunity to review" Stewart's bail decision. Kinnucan is due in a New York courtroom on March 8.
Manhattan federal prosecutors had asked Stewart to keep Kinnucan behind bars, citing alleged threats against them, witnesses and agents of the Federal Bureau of Investigation. But Stewart denied that request and said that Kinnucan could go free, although her conditions were tough: home confinement, electronic monitoring and surrender of his passport. She also ordered Kinnucan to remain employed full-time, barred him from using drugs or drinking alcohol, and even ordered him to remove the booze from his home.
Stewart, who said she did not expect Kinnucan to flee, added a further admonition: "Keep your mouth shut." Kinnucan was barred from speaking to prosecutors or FBI agents.
The final restriction is no doubt due to what prosecutors said were several threatening phone calls made to assistant U.S. attorneys, FBI agents and a witness cooperating with the investigation. Assistant U.S. Attorney Christopher LaVigne has asked Stewart to hold Kinnucan until a judge in New York was able to consider his request to be released.
According to prosecutors, over a two-month period, "Kinnucan has engaged in volatile and extreme conduct, using references to genocide, violence and physical harm directed to the targets of his ominous tirades." In one instance, Kinnucan allegedly left a voice message for a prosecutor, calling him a "scummy piece of shit" and lamenting, "too bad Hitler's not around. He'd know what to do with scum like you."
To a cooperating witness, Kinnucan left a voice mail earlier this month, asking, "How the fuck can you live?" and "why don't you just fucking kill yourself?"
At yesterday's hearing, Kinnucan admitted that his statements were "mean-spirited and wrong" but were not "intended to convey threats."
Kinnucan, who has denied any wrongdoing, was formally indicted Tuesday. Prosecutors say that Kinnucan obtained confidential corporate information from insiders and passed it along to his clients, among them a number of prominent hedge funds. Two of those alleged sources have already pleaded guilty to tipping Kinnucan and are cooperating with the investigation.