Charges of insider trading are extremely serious, and can arise when an individual makes use of information that he or she is privy to, and uses these to manipulate share markets.  The head of an investment firm in Oregon is pleading guilty to charges of insider trading and securities fraud. 

The lawsuit alleges that the man lured employees of several public companies to give him privileged information about stocks.  This data was then sold to hedge funds.

55-year-old John Kinnucan was charged with constancy to commit securities fraud and securities fraud.  He has now agreed to a plea deal.  Under the terms of the plea deal, he will serve about 4 to 5 years in prison.  He would otherwise have been looking at a possible life term of approximately 45 years.

Kinnucan has admitted to the judge that between 2008 and 2010, he obtained non-public information from employees of public companies.  The information was transmitted to companies, who made use of the data to obtain profits before there was a public announcement of any developments.  He offered employees at the public companies both cash as well as nonmonetary benefits in order to get them to divulge secrets.  In one case, he paid a source for insider information details, and in another case, he agreed to invest $25,000 in a person's business in exchange for information.

Kinnucan‘s case became even more complicated when he made several obscenity-containing phone calls to prosecutors.  Those repeated phone calls to prosecutors threatened them with violence, including sexual assaults.  As a result of those telephone calls, Kinnucan has remained in prison since he was arrested.