He's either a hero or a buffoon, but John Kinnucan, a tech analyst with Broadband Research, did nearly everything he could to goad the FBI until they came and got him.
On Thursday, federal agents arrested him at his Portland, Oregon home on charges of conspiracy to commit securities and wire fraud. Today he's expected to be arraigned and eventually prosecuted in New York. For the last two years, Kinnucan has been publicly taunting the FBI, on television and in print, as it carries out its much-touted "biggest insider-trading probe in a generation." The lesson? Insulting the Feds is probably a bad idea.
Kinnucan's troubles started in October 2010 when FBI agents asked him to secretly tape his clients to assist the FBI's insider trading probe. Not only did Kinnucan refuse—he went on CNBC to bash the Feds over its proposal:
HOST: "A lot of people say, don't mess with the Feds when they come into your yard and ask for your cooperation you're better off giving it. Most people would say you certainly don' t want to go on television. But you've chosen to do that. I'm just curious as to why?"
KINNUCAN: "I feel very strongly I've done nothing wrong. My clients have done nothing wrong... I just felt it was the right thing to do."
He went on to call the visit by the Feds "surreal" and confessed to telling his clients about being approached. Shortly after his television appearance on CNBC, an internal memo from Kinnucan to his clients was published on CNBC in which Kinnucan calls the Feds he dealt with "fresh faced eager beavers." Gutsy move? Or extremely foolish?
Ratcheting up the volume, he took to The New York Times to punctuate his TV performance in a Dealbook column titled "Why I Chose Not to Wear a Wire" on Nov. 29. In the piece, he explained that when the FBI visited him in October of 2010, they threatened to arrest him on the spot. He refused however because he believed in his innocence and thought assisting the Feds would be an admission of guilt. "My personal belief is that much of this activity is politically motivated, and will ultimately only delay the return of the confidence of Main Street and Wall Street in our country," he wrote. "This, along with my firm belief that my clients and I have done nothing wrong, is why I have chosen to take a stand. It’s about fighting for what I believe should be fair dealings between individual citizens and their government."
In an email message last month, he said he made the calls to the FBI agents to force public exposure of their "criminal activities" and "Constitutional violations." He said in a follow-up email that the calls were threatening only "to the poor FBI agent's ego."
Did the guy have a death wish? We would love to hear what lawyers, if any, advised him on his brush with the Man.