John Kinnucan: Hero or schmuck?

December 10, 2010: 5:00 AM ET

The consultant at the center of the FBI's insider trading probe has grabbed the microphone and won't let go. Is it an amateur move? Or a brilliant one?

Sometimes, it's difficult to figure out the motive behind people's actions. Take Julian Assange, for example. Is he actually an anarchist? Or just a wannabe playboy? It's hard to say. Maybe he's both.

Then there's John Kinnucan, heretofore-unknown technology researcher and current toast of the financial airwaves. Kinnucan, you may recall, runs a research firm called Broadband Research that connects investors with industry participants for a fee. He was contacted by the FBI at the end of October and asked to wear a wire in an insider-trading investigation targeting certain hedge funds, including the Big Kahuna, Steve Cohen's SAC Capital.

That's when we first heard of him. And now it seems he won't leave the CNBC set. He even told CNBC's John Carney he might write a book about his adventures -- a book that's sure to just leap off the shelves.

Anyway, not only did Kinnucan refuse to play ball with the FBI, but he also alerted all his clients about the investigation via email. He even mocked the investigators in said email, calling them "fresh faced eager beavers." Oh, John, you old cynic, you. Did it occur to you that those beavers might be working eagerly in the service of the law? And that you were tipping off actual bad guys about an impending sting?

Of course it did. This is why you are the anti-hero of the season. Enjoy your fifteen minutes, Mr. Kinnucan, because it's almost over. And Steve Cohen still isn't inviting you to the company Christmas party. The light emanating from around you isn't fame. It's radioactivity. Why taunt the FBI and federal investigators? Who do you think you are, Rod Blagojevich?

Who knows what this man's motives are in refusing to step out of the spotlight – his lawyer must be laughing all the way to the bank – but he sure seems to be enjoying himself. Thursday morning, he saw fit to call a blogger to tell her that an SAC trader identified in the press was not someone the FBI had mentioned to him. When asked just who the FBI was after, he demurred, saying he didn't want to obstruct justice. The man's got a way with words. Maybe he should write a book.

Publicly taunting the Feds

He wouldn't be the first guy to write a book to reburbish his good name. Steven Rattner seems to be wading a little far into the he-doth-protest-too-much waters in his feud with New York Attorney General and Governor-elect Andrew Cuomo. Rattner's book on the auto bailout, Overhaul, was a little too self-serving for the New Yorker's Malcolm Gladwell, with whom Rattner is also feuding. So now Rattner's fighting battles on two fronts, both of which he will likely lose. The first is with one of America's best journalists. The other with one of its most dogged prosecutors. And there's poor little Steven Rattner, friend of Arthur Sulzberger and Bill Clinton, being persecuted for no reason at all. When will it all end?

Rattner and his wife are apparently telling people that Cuomo's pursuit of him is "political" (which is odd, considering they are both Democrats, but let's just set that aside) and that he is the victim of a legal witch-hunt. This is the same guy who has settled with the SEC in a kickback scheme, has been disowned by his former firm, Quadrangle Group, and who would have us believe he bought distribution rights to Chooch, an indie movie being made by the brother of a state pension fund employee with whom Rattner wanted to do business because it was "commercially reasonable." Rattner is obviously used to getting his own way, and because Cuomo won't leave him alone, he's apparently taken to complaining about his persecution to any and all who happen to be in the same room.

Give it a break, Steve. Seriously. Why taunt the Attorney General in this way? Who do you think you are, John Kinnucan?

I'm all for innocent until proven guilty, of course, and there just might be the possibility that Rattner did think Chooch, about "a Queens ne'er-do-well who lets down his softball team" really was a top-notch investment opportunity. Or not.

It's one of the paradoxes of the modern information era – when the paper trail is now virtual and seemingly never-ending and there are cameras everywhere you turn – that people somehow still feel emboldened to strenuously deny that which is seems pretty obvious to the rest of us. I'm thinking of Galleon's Raj Rajaratnam, still claiming he's done nothing wrong while a few dozen people have already pleaded guilty of engaging in insider trading with the man. He's even got his own web site, which is kind of a dumping ground for government documents the rest of us don't have time to read anyway.

Who does he think he is? Julian Assange?

Call it the Sarah Palin effect. After all, she's the high priestess of denying that she said something that she just said, and then somehow turning that denial around on her interlocutors.

And just who does she think she is? Oh, right. The most popular politician in the country. I guess if it works for her, it might just be worth trying.

Also on Fortune.com:

Hedge funds on insider probe: Bring it on

The six degrees of Steve Cohen

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About This Author
Duff McDonald
Duff McDonald
Contributing Editor, Fortune

Duff McDonald is a contributing editor at Fortune. He has also written for New York, Vanity Fair, Condé Nast Portfolio, GQ, WIRED, Time, Newsweek, and others. In 2004, he was the recipient of two Canadian National Magazine Awards -- best business story (gold) and best investigative reporting (silver) -- for "Conrad's Fall" in National Post Business. Last Man Standing, his biography of Jamie Dimon, chairman and CEO of JPMorgan Chase, was published by Simon & Schuster in October 2009. He is also the co-author, with Owen Burke, of The CEO, a satire.

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