Bailout

How the FBI puts researchers out of business

By Felix Salmon

Remember the rather wonderfully worded e-mail sent out to clients by John Kinnucan of Broadband Research in October?

Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information,” the email said. “(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman’s gracious offer to wear a wire and therefore ensnare you in their devious web.

Today Susan Pulliam reveals just how harmful that visit was:

At the age of 28, Mr. Kinnucan was hit by a bus while jogging in Florida, suffering four broken bones, two collapsed lungs, a lacerated liver and internal bleeding. When the FBI visited, he says, “I just thought about being under that bus and knowing you have to keep fighting.” …

He says that he hasn’t heard back from the FBI agents since their surprise visit, but that his business has imploded. Many of his clients, he says, won’t be able to use his services now that he is under investigation. “I’ll have to figure out something else to do,” Mr. Kinnucan says.

It’s pretty easy to see, here, how the FBI agent in question, David Makol, has developed a reputation for being able to “flip” the people he’s investigating. If they cooperate, they can continue to work. If they don’t, they’re put out of business?a harsh punishment indeed given that they have been convicted of absolutely nothing.

Full post as published by Macroprudential on November 22, 2010 (boomark / email).