A small piece of advice to John Kinnucan of Broadbend Research: if the Feds ask you to wear a wire, wear one. They asked him politely in October. Now, the G-Men are taking off the gloves.
Like many of his clients, Kinnucan has been given a subpoena as part of the Justice Department’s extensive investigation into insider-trading. Kinnucan, who said he received the information request on Friday morning, said he would respond to the subpoena, which seeks all of Broadbent’s records for the last three years.
Kinnucan became something of minor celebrity—and hero to some—when he declined the FBI’s request to cooperate with the investigation and to wear a wire in conversations with one of his clients, reportedly SAC Capital Advisors. Unfortunately, the scrutiny placed on him—and other providers of “expert networks”—has forced him to shut down Broadbend. Kinnucan said he won’t even be hiring a lawyer to handle the subpoena because he can’t afford one.
He told Reuters that he has set up a legal defense fund and asked his former clients to contribute, but that none have. Some are perhaps upset with the e-mail he sent after his first visit from the FBI announcing his refusal to cooperate.
It seems Kinnucan failed to utilize the blind carbon copy option, allowing the 50 recipients to see who else got the e-mail. It also allowed someone with a copy of the e-mail to give the names to Reuters, which reports that the recipients included people at hedge funds Coatue Management, Citadel Investment Group, Maverick Capital and SAC, as well as Ameriprise Financial and Sonar Capital Management. As many as five employees of mutual fund firm Wellington Management also got the e-mail.
