Hedge Fund Tipster Kinnucan Gets 51 Months

Jan 15 2013 | 1:26pm ET

A investment researcher has been sentenced to more than four years in prison for passing confidential information to hedge funds and others.

Broadband Research founder John Kinnucan burst into the headlines two-and-a-half years ago when he defiantly rejected the Federal Bureau of Investigation's attempt to win his cooperation in their insider-trading crackdown. Instead, Kinnucan sent an e-mail to his clients, including employees of Coatue Management, Citadel Investment Group, Maverick Capital and SAC Capital Advisors, telling them that the FBI wanted him to wear a wire in his discussions with them.

Kinnucan was finally arrested a year ago. Facing up to 45 years in prison if convicted, thanks in part to threatening voicemails he left for prosecutors, he pleaded guilty in July.

Today, U.S. District Judge Deborah Batts sentenced him to 51 months in prison. He also agreed to forfeit $164,000.

Imposing sentence, Batts blasted Kinnucan for having "lashed out in anger." He "made a spectacle of himself" by leaving "obscene, hateful, despicable and repetitive" messages for prosecutors. "Threatening personally government authorities who are doing their jobs by investigating insider trading cannot be tolerated," she said.

“Today’s sentence of John Kinnucan is a fitting conclusion to a criminal odyssey that began with the buying and selling of inside information and evolved into a vile and very public campaign to threaten public servants and obstruct the federal investigation into Kinnucan’s conduct," Manhattan U.S. Attorney Preet Bharara said. "Mr. Kinnucan will now pay for both crimes with his liberty.”

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