For two years, John Kinnucan waged a nasty battle with the Justice Department, mocking F.B.I. agents and threatening prosecutors as they investigated him for insider trading.
On Tuesday, the government secured a victory in its war with Mr. Kinnucan when a judge sentenced him to four years and three months in prison. He appeared in Federal District Court in Manhattan before Judge Deborah A. Batts, who also ordered him to forfeit $164,000 in illegal profits.
“Today’s sentence of John Kinnucan is a fitting conclusion to a criminal odyssey that began with the buying and selling of inside information and evolved into a vile and very public campaign to threaten public servants and obstruct the federal investigation,” said Preet Bharara, the United States attorney in Manhattan, in a statement. “Mr. Kinnucan will now pay for both crimes with his liberty.”
Mr. Kinnucan, 55, who ran Broadband Research in Portland, Ore., pleaded guilty last July to leaking secret information about technology companies to hedge funds. On Tuesday, the once-defiant Mr. Kinnucan expressed remorse. “I’d just like to say I’m sorry to everyone involved for all the trouble I’ve caused,” he said.
The case against Mr. Kinnucan has been among the more bizarre strands of the government’s broad crackdown on criminal activity at hedge funds.
His name first emerged in November 2010, when The Wall Street Journal reported that the F.B.I. had tried to persuade him to record telephone calls with his clients, including SAC Capital Advisors. He rebuffed the request and boasted about his recalcitrance in an e-mail to his hedge fund customers.
“Today two fresh faced eager beavers from the F.B.I. showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information,” the e-mail said. Mr. Kinnucan added that he “declined the young gentleman’s gracious offer to wear a wire and therefore ensnare you in their devious web.”
He then went on something of a publicity campaign, appearing on CNBC and writing a commentary for DealBook titled “Why I Chose Not to Wear a Wire.” In interviews and writings, he argued that he had not violated the law because the information he provided clients was publicly available.
As the investigation wore on, Mr. Kinnucan grew more belligerent. He made nearly 25 threatening telephone calls to F.B.I. agents and prosecutors, many of them laced with repeated references to sexual and other forms of violence, the government said.
“Too bad Hitler’s not around,” Mr. Kinnucan said in one voice message left for a prosecutor. “He’d know what to do with you. You should be in a gas chamber.”
The government charged Mr. Kinnucan last February. He admitted to supplying customers with confidential data about companies including SanDisk and Flextronics. Prosecutors said Mr. Kinnucan had built a deep network of sources at public companies by paying them cash and providing them with illegal tips.
“Insider trading is a serious crime,” Judge Batts said during sentencing, “and obstruction of justice by threatening personally the government authorities who are doing their jobs by investigating and prosecuting insider trading cannot be tolerated.”
DealBook: Analyst Sentenced to 4 Years in a Turbulent Insider Case
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DealBook: Analyst Sentenced to 4 Years in a Turbulent Insider Case
