Apple is have a solid presence for Wall Street fellows and the information regarding Apple’s sales and possible progress is of course of key importance for those who trade Apple’s stock. Researchers have been involved in obtaining information regarding Apple’s sales from it’s Asian supply chain members. While just obtaining such information for research purposes is fine, some have crossed the line by indulging into insider trading. And now, one such analyst who did so has been arrested and charged.
John Kinnucan has been involved in the illegal act of insider trading. The main allegation against him is that he obtained key information regarding Apple from Apple’s suppliers such as SanDisk and Flextronics and then sold that information to hedge fund managers for hundreds of thousands of dollars.
A former SanDisk employee, Don Barnetson has already submitted to the charge, saying, “I conspired with a consultant to provide confidential information with respect to my employer at the time, SanDisk Corp.” The ongoing investigation against Kinnucan states that he has been paying and luring executives from different companies to divulge different information regarding iPhone sales. He then sold this information to his clients who, the report says, have been to make a cool $1.58 million on the basis of this information.
The statement from the U.S. Attorney stated, “John Kinnucan used financial incentives, fancy meals and other inducements to curry favor with public company insiders so they would serve up their employers’ secrets.”
So far about 60 people have pleaded guilty during the investigation of this entire scandal, a project which has been named Operation Perfect Hedge. Former executives from Flextronics have also been charged for revealing highly significant information to Kinnucan against money and other favors. FBI is also continuing a ‘channel check’ on such analysts who claim to have inside source in Apple’s supply chain.
Image courtesy Farkas.