Jailed Kinnucan Won't Settle SEC Case

Mar 5 2013 | 10:47am ET

John Kinnucan, the expert-network analyst who pleaded guilty last year to passing confidential corporate information to hedge funds, may be behind bars, but he's driving a hard bargain with the Securities and Exchange Commission.

Kinnucan has refused to settle the SEC's insider-trading lawsuit against him, despite his previously telling the regulator that he planned to. "I spoke with him again today and he informed me that he now does not intend to attempt to settle this matter," SEC lawyer Mathew Watkins told U.S. District Judge Alison Nathan yesterday.

Kinnucan was sentenced to 51 months in prison in January for conspiracy and securities fraud. He is serving as his own lawyer in the SEC case, from his Brooklyn, N.Y., jail cell.

The Broadband Research founder's intransigence with the SEC is a reminder of his attitude prior to his guilty plea in July. Kinnucan achieved a measure of fame when he e-mailed his clients, including employees of Coatue Management, Citadel Investment Group, Maverick Capital and SAC Capital Advisors, telling them that he declined the offer of "two fresh-faced eager beavers from the FBI" to cooperate in the insider-trading probe. After he was charged, he left at least 24 threatening voicemails with prosecutors, FBI agents and cooperating witnesses.

Nathan told the SEC to file a motion for a ruling before trial by March 22. Kinnucan will have until April 19 to respond.

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