Analyst John Kinnucan is charged with two counts of securities fraud, two counts of conspiracy, and insider trading for leaking sales numbers from Apple, reported Reuters. The lawsuits against the analyst were filed in a U.S. District Court in Manhattan, and he was arrested on Thursday.
Kinnucan received tips from Apple’s suppliers SanDisk and Flextronics so he could leak sales numbers and forecasts to hedge funds. One SanDisk executive, Don Barnetson, is also in court on counts for insider trading. Kinnucan leaked the secret information about the iPhone’s sales between 2008 and 2010, and he would get the information by bribing suppliers. He is rumored to have earned $1.58 million for leaking Apple’s trade secrets.
Between 2008 and 2010, investigators said, Kinnucan paid insiders with cash, trips and other benefits to get secret information, including sales trends for Apple Inc’s iPhone. Kinnucan then funneled the information to hedge fund traders in California and New York in exchange for hundreds of thousands of dollars, investigators said.
Kinnucan’s arrest is part of a bigger crack down on insider trading within hedge funds. Over 60 people were already arrested during the operation, dubbed “Operation Perfect Hedge,” including a Flextronics executive for leaking iPhone sales numbers.