NY judge sets $5M bail for head of Oregon firm

February 23, 2012 - 8:45 PM

NEW YORK (AP) — Bail was set at $5 million Thursday for the president of an Oregon investment research firm whose obscenity-laced phone calls to prosecutors and FBI agents was described as disgraceful by the judge who will preside over his securities fraud case.

U.S. District Judge Deborah A. Batts said the bail for John Kinnucan can be secured with $100,000 in cash or property, but his lawyer said the defendant's home cannot be used because he owes more than it is worth.

The judge also ordered Kinnucan not to use any electronics such as computers or telephones while he awaits trial on charges that he used his position as president of Broadband Research LLC to lure secrets out of public company insiders. The government said he would then sell the information to hedge funds and money managers as if it were legitimate research.

A large video screen in the Manhattan courtroom showed Kinnucan sitting next to his lawyer, T.J. Hester, in Portland, Ore., where he has been held since his arrest last week.

Batts conducted the hearing after a judge in Portland said a day earlier that he could be released to the custody of his wife with electronic monitoring. She left in place the home-detention order but tightened bail conditions by telling Kinnucan he will be incarcerated immediately if he uses any communication device or contacts anyone in the criminal justice system. She also banned him from using alcohol or illegal drugs.

She asked him if he understood.

"Yes, your honor, I do," Kinnucan said. "I'll do my part."

Prosecutors asked Batts to order him confined until trial as a danger to the community. To support their argument, they played audio tapes of six messages Kinnucan left with prosecutors, FBI agents and, in one call, a cooperating witness in the case. The profanity-filled rants included religious and ethnic slurs.

"There's no defending the things that he said," Hester said, though he added that Kinnucan's wife of 17 years told him that her husband had progressed from a half bottle of wine each day to two or three bottles after his mother and two brothers died last year.

"The vile, filthy, inflammatory, insulting language the defendant has used frequently with officers of the government and even worse with potential witnesses is mindboggling," the judge said.

Still, she said she saw no direct threat in the phone messages that would require he be held without bail.