Bloomberg News has a profile of John Kinnucan, the stock analyst who says he refused to participate in an FBI operation against a client. At least two points struck me as interesting. From the Bloomberg article:
His outspokenness may come with a price.
"He's violating rule number one: don't do anything that might upset the prosecutors," said Andrew Stoltmann, a securities lawyer in Chicago.
That "rule" may be good practical advice for clients facing potential prosecution, but it doesn't exactly a encourage a robust public debate about prosecutorial tactics or the rule of law.
Kinnucan, who purchased his house in an upscale part of Northeast Portland for $1.5 million in 2006, said his business is ruined. All his clients deserted him after he told them in an e-mail that the FBI had visited, something he was contractually obliged to do, he said.
This is the sad reality of the situation — that in many cases, government authorities can ruin a company or a person without even filing charges, much less actually bringing a case to trial and winning a conviction. Merely leaking news of an investigation to the press can trigger a pile-on or feeding frenzy that can ruin a firm's reputation or, in the case of a hedge fund, trigger a wave of redemptions that forces the fund to liquidate assets.