Government Charges Vocal Critic in Insider Trading Case

John Kinnucan was accused of swapping corporate secrets with hedge funds for cash.

By Azam Ahmed & Ben Protess

Federal authorities on Friday charged one of the most vocal and vehement critics of their campaign to root out insider trading on Wall Street, accusing John Kinnucan, an Oregon-based research analyst, of swapping corporate secrets with hedge funds for cash.

The analyst, who drew attention last year for openly challenging the investigation, was arrested at his home on Thursday on allegations that he collected insider tips gleaned from executives at technology companies, including SanDisk. To gather the information, the government claimed, Mr. Kinnucan lavished his sources with gifts that included ski trips, fancy meals and cash.

Mr. Kinnucan was paid about $30,000 a quarter by two hedge funds that traded on portions of the insider information, according to the government’s complaints. But unlike other cases that have implicated the hedge funds themselves, the complaints say that Mr. Kinnucan masked his efforts as legitimate research, assuring his clients that the information did not include illegally obtained insights.

“Kinnucan’s company, Broadband Research, was a misnomer,” said Janice K. Fedarcyk, the assistant director in charge of the Federal Bureau of Investigation. “It was inside information Kinnucan bought from company insiders. That kind of information beats research every time.”

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