Outspoken analyst Kinnucan admits to insider trading

INSIDERTRADING-KINNUCAN-PLEA:Outspoken analyst Kinnucan admits to insider trading

new York  July 26, 2012, 1:23 IST

new York  07 26, 2012, 01:30 IST

 

A brash securities research analyst who publicly refused to cooperate with a broad U.S. government probe of insider trading pleaded guilty on Wednesday to criminal charges under a plea deal that could send him to prison for nearly five years.

John Kinnucan, 55, of Portland, Oregon, who headed Broadband Research LLC, said at a plea proceeding in Manhattan federal court that he obtained confidential information from employees of public companies between 2008 and 2010 and fed them to his hedge fund clients.

He mentioned F5 Networks Inc as one of the companies, but charges announced in February also cited SanDisk Corp , OmniVision Technologies Inc and Apple Inc .

"I knew that the sources of this information had an obligation to keep the information confidential, but the sources gave me the information in exchange for personal benefits," Kinnucan, bearded and wearing a beige prison smock, said in court.

U.S. District Judge Deborah Batts accepted his plea of guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud. Kinnucan had previously pleaded not guilty on March 14.

Under the plea deal, he could be sentenced to between 46 months and 57 months in prison.

Kinnucan also admitted trying to obstruct justice in the case by making expletive-laced phone calls and sending emails to federal prosecutors, FBI agents and a cooperating witness to intimidate them. He did not address the issue on Wednesday, but he had apologized at a bail hearing in March.

His court-appointed lawyer, Jennifer Brown, said outside the courtroom that Kinnucan's guilty plea was "a first step to repairing the damage he caused both to his family and to the public."

Kinnucan, who has run out of money, was denied bail and remains in custody until his sentencing on January 15, 2013.

Manhattan U.S. Attorney Preet Bharara, whose office has prosecuted dozens of cases of insider trading in the past three years, said in a statement that Kinnucan's "attempts to obstruct justice in a repugnant and disturbing manner were ultimately fruitless."

The case is USA v Kinnucan, case No. 12-00163, U.S. District Court for the Southern District of New York. (Editing by Steve Orlofsky)