Wednesday, 24 August 2016
Last updated 3 hours ago
Feb 24 2012 | 4:31am ET
Following another tongue-lashing from a federal judge, accused insider-trader John Kinnucan is set to go free after more than a week in jail.
Kinnucan, arrested last week and indicted earlier this week on conspiracy and securities fraud charges, can be released on $5 million bond, U.S. District Judge Deborah Batts in New York ruled. But she said she came very close to keeping Kinnucan behind bars after prosecutors played several abusive voice mail messages left by Kinnucan for assistant U.S. attorneys, Federal Bureau of Investigation agents and at least one cooperating witness.
To one prosecutor, he lamented, "too bad Hitler is not around. You should be in the gas chamber."
"The vile, filthy, inflammatory, insulting language the defendant has used frequently with officers of the government, and even worse with potential witnesses against him, is mind-boggling," Batts said at the hearing, which Kinnucan attended via videoconference from a Portland, Ore., courtroom. While she came "extremely close" to ordering his continued detention, "I cannot say there is a direct threat, although he is certainly intimidating people or attempting to do so."
Batts barred Kinnucan from using his telephone or computer to contact anyone other than his court-appointed lawyer, Thomas Hester.
"What you have done is disgraceful," Batts said. "The defendant is to have no contact with any device, no computer, no cell phones, no regular phones. He is not to have contact with anyone. If you call anyone, if you use any kind of device, you will be remanded."
"Yes, your honor," Kinnucan said.
Batts had blocked Kinnucan's release on Wednesday, staying a Portland judge's decision to release Kinnucan into home confinement without bail. Batts said Kinnucan can't be freed until be posts the bond, secured by $100,000 in cash or property and signed by four people.
Batts also order Kinnucan to appear in New York on March 5, and told him to tell prosecutors "when he is coming, how he is coming, where he is staying, when he's leaving and how he's leaving."
Hester told Batts that Kinnucan's Broadband Research has lost most of its clients and that his house is in foreclosure. He also said that his client denies any wrongdoing.
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.