Broadband Research’s John Kinnucan, an analyst asked to cooperate in an FBI insider trading probe, talks to “The Strategy Session” hosts.


Hat tip Dealbook

Category: Legal, Video

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One Response to “Broadband Research’s John Kinnucan Tells FBI Off”

  1. CardinalRam says:

    The information that he is gathering (contracts won, lost, sales projections and/or production schedules adjusted) is normally proprietary and confidential. I work for a small tech company, and we CERTAINLY do not want it known when we have lost a bid!

    The fact that this information leaks out eventually and makes into the public sphere (i.e., briefing.com), is not what the Feds are probably going after. It is the time interval between him learning of it and it hitting briefing.com, i.e., becoming public information and what is DONE during that interval that creates the legal problem.

    Consider Eddie Murphy & Dan Akroyd’s Trading Places final scenario – their characters used information that was going to become public (the orange crop projection) BEFORE it became public. This gave them an unfair advantage that they used to bolster their own profits.

    For a free market to really work, there must be equal access to ALL relevant information. If anyone has access to information that the rest of the market does not, then trading is done at a disadvantage to the less-informed party, and the free market principle is subverted.

    Given the prevalence of extreme short term investment strategies and the high volatility currently in the market, having non-public information for as little as a 24 hours ahead of the rest of the market can be a substantial (and unfair) edge.

    Do not get me wrong. I am in favor of solid research that ferrets out over-looked (but PUBLIC) information or connections. That is something that an open market really needs to thrive. But that is not what Kinnucan exclusively does, nor what his clients pay for….