November 22nd, 2010 | by NIGEL JAQUISS News | Posted In: CLEAN UP, Politics

Portland Man Identified in "Vast Insider Trading Probe"

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A tantalizing headline topped the front page of this weekend's edition of the Wall Street Journal: "U.S. in Vast Insider Trading Probe."

Insider trading is the practice of using material, non-public information to trade stocks. For example, if an employee of a widget company learns his firm plans to buy a competitor, he might tell a friend to buy up tens of thousands of shares of the competitor's stock before the takeover news becomes public. Both the tipper and the friend getting the tip in that example stand to benefit from misusing information.

Last year, federal investigators brought one of the largest insider trading cases ever, targeting a tangled web of hedge fund traders and tech-industry insiders. The investigation the WSJ revealed over the weekend may be even larger and the paper identified a Northeast Portland man, John Kinnucan of Broadband Research, as one of those under scrutiny.

Here's how The Journal introduced Kinnucan:
Independent analysts and research boutiques also are being examined. John Kinnucan, a principal at Broadband Research LLC in Portland, Ore., sent an email on Oct. 26 to roughly 20 hedge-fund and mutual-fund clients telling of a visit by the Federal Bureau of Investigation.

"Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information," the email said. "(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web."

Today's edition contains a more in-depth portrait of Kinnucan, also on the front page.

(FBI logo courtesy FBI.gov)
 
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