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Insider Trading: Technology Research Analyst Pleads Guilty

July 25, 2012
[ by Howard Haykin ] THE GIG IS UP! for John Kinnucan, the brash securities analyst who founded  Portland, OR-based Broadband Research LLC.  On Wednesday, Kinnucan, 55, 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. 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 5 years.  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. U.S. District Judge Deborah Batts accepted his plea of guilty to one count of conspiracy to commit securities fraud and 2 counts of securities fraud.  Kinnucan had previously pleaded not guilty on 3/14/12, and he had publicly refused to cooperate with a broad U.S. government probe up until this day.  Under the plea deal, he could be sentenced to between 46 months and 57 months in prison. Kinnucan further admitted to trying to obstruct justice in the case by making expletive-laced phone calls and sending e-mails to federal prosecutors, FBI agents and a cooperating witness to intimidate them.  None of this was addressed during his plea hearing. Personal Sentiments of the Defendant. Kinnucan's court-appointed lawyer, Jennifer Brown, said outside the courtroom that her client'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 1/15/13. Personal and Professional Sentiments of Prosecutors. Manhattan U.S. Attorney Preet Bharara, whose office has prosecuted dozens of cases of insider trading in the past 3 years, said in a statement that Kinnucan's "attempts to obstruct justice in a repugnant and disturbing manner were ultimately fruitless." The case: USA v Kinnucan, U.S. District Court for the Southern District of New York, No. 12-00163. For the USA: Avi Weitzman and Katherine Goldstein of the U.S. Attorney's Office.  For Kinnucan: Thomas J. Hester of the Office of the Federal Public Defender. For further details, go to:  [Reuters, 7/25/12].