March 25 (Bloomberg) -- John Kinnucan, an expert-networker who mocked the U.S. government’s insider-trading probe before pleading guilty to the crime, must pay $6.33 million in a civil case brought by the Securities and Exchange Commission, a federal judge ruled.
U.S. District Judge Alison Nathan in Manhattan cited Kinnucan’s “high degree of bad intent” today in imposing the maximum triple penalty on the founder of Broadband Research LLC, an expert-networking firm he ran from his home in Portland, Oregon. Nathan ruled that Kinnucan must turn over $1.58 million in ill-gotten gains, plus interest, and a $4.75 million penalty.
Kinnucan, 56, pleaded guilty in 2012 to one count of conspiracy and two counts of securities fraud for obtaining and passing illegal tips to hedge fund clients, including two in New York. He was sentenced to four years in prison after admitting he befriended employees of technology companies and got inside information about SanDisk Corp., F5 Networks Inc. and OmniVision Technologies Inc.
In the months before his arrest, prosecutors claimed, Kinnucan carried out a campaign of threats against U.S. agents, prosecutors and a witness working with the government. In a 2012 hearing, prosecutors played profanity-filled voice-mail messages from Kinnucan containing ethnic and racial slurs.
“Too bad Hitler is not around. You should be in the gas chamber,” Kinnucan said in one message left on a federal prosecutor’s office phone in December 2011.
Kinnucan, who represented himself in the SEC case, is serving his sentence in a federal prison in California and couldn’t be immediately reached for comment on today’s ruling.
The case is Securities and Exchange Commission v. Kinnucan, 12-cv-01230, U.S. District Court, Southern District of New York (Manhattan).
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