Kinnucan accused of fraud

A slew of insider trading charges were leveled Friday against a Portland, Oregon-based analyst who allegedly provided significant leaks regarding the technology industry. Consultant John Kinnucan was accused of two counts each of securities fraud and conspiracy for reportedly passing on secret information about F5, Flextronics, and SanDisk to hedge funds that in turn unfairly benefited from the information to a combined $1.58 million. Sources at Flextronics and SanDisk ended up relating information about Apple's iPhone patterns.

The techniques were said to have involved expensive meals and other attempts to court key executives that then passed on the private information. Don Barnetson, formerly of SanDisk, had admitted taking information between 2008 and 2010 from Kinnucan in return for leniency from prosecutors.

Among those who received insider info from Kinnucan was believed to be former Carlson Capital staffer Dan Grossman, who had previously worked at Level Global. This last firm itself had faced insider trading arrests and was shut down as a result.

The charges are considered a possible culmination of Operation Perfect Hedge, a government investigation made public in late 2009 that was meant to curb insider trading among hedge funds and other investors. A year later, Kinnucan drew attention when he refused to wear FBI surveillance equipment to relay information about trading and even warned many of those he knew by e-mail that a probe was underway.

If convicted, Kinnucan could face sentences of up to 20 years each for three of the charges, and a maximum of five years for one of the conspiracy charges. [via Reuters]

By Electronista Staff

Post tools:

TAGS :  

iPhone, Investor, industry, gadgets, upgrades/storage, SanDisk, mobile phones, Apple, Flextronics