Trader Tells Why He Turned Down FBI "Offer"

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    NEWSLETTERS

    Jon Kinnucan interviewed on CNBC.

    An Oregon financial analyst spoke Tuesday about how FBI agents questioned him in the ongoing insider trading investigation.

    Jon Kinnucan said FBI agents advised him he was part of the ongoing probe that included some top Wall Street firms, and that he should wear a wire against some of his clients.  But Kinnucan declined the offer.

    "I feel very strongly I have done nothing wrong.  My clients have done nothing wrong," Kinnucan said in an interview with CNBC

    "They immediately began rattling off a bunch of my research and insinuating it was improper. They started rattling off a bunch of my research."

    But Kinnucan said he does the same kind of research done by the major banks.  And he points out how contacts of his at major companies have lunch with research analysts all the time. 

    Instead of cooperating with the FBI, Kinnucan said he emailed his clients telling them of the FBI visit - even though he said agents warned him disclosing the meeting could be considered 'obstruction of justice.' 

    "They wanted to help," the 53-year-old researcher said he was told.  "[They said] 'We need to hear from you in 48 hours or there will be trouble for you.'"

    Kinnucan said his business is now "destroyed."  He said he did research for major hedge funds like SAC and other financial firms.  Three hedge funds were raided by the FBI Monday. 

    Investigators were seen removing boxes from Diamondback Capital in Stamford, Connecticut, Level Global in New York and  Loch Capital Management in Boston.  Spokesmen for the firms confirmed the searches and claimed the firms were cooperating with the FBI.

    As for Kinnucan, he said he knew something was up last week the minute the FBI agents pulled up to his house around 4 pm as he was drinking a glass of wine on his porch.   "A couple of suits jumped out of the sedan in front of my house.  They were not Portland suits.  They were definitely New York suits. So it was a little like a flying sources landing in the 'hood.'"

    The FBI and spokesmen for Manhattan US Attorney Preet Bharara declined to comment on the searches or the contact with Kinnucan.  Last month WNBC first reported on Bharara's public statement that insider trading on Wall Street is 'rampant' suggesting many arrests would soon be made.

    Some officials suggest the first arrests in this wide-scale investigation could come before the end of the year.