By Nate Raymond
NEW YORK, June 25 (Reuters) - A former executive of SanDisk
Corp was sentenced on Tuesday to a year of probation
after admitting to supplying illegal tips to a hedge fund
Donald Barnetson, 39, pleaded guilty in February 2012 to a
charge of conspiracy to commit wire fraud and securities fraud
as part of a broad U.S. government crackdown on insider trading.
At a hearing in federal court in New York, U.S. District
Judge Kimba Wood also ordered Barnetson to pay a $4,000 fine.
Barnetson was one of a number of defendants charged as part
an insider trading investigation focused on expert networking
firms, which connect high-end investors with industry experts.
Prosecutors said that Barnetson, a senior director at
SanDisk, a maker of memory chips, had provided confidential
information to a consultant who ran a research firm in Portland,
The consultant, identified in court papers as John Kinnucan,
obtained insider information about companies including SanDisk,
F5 Networks Inc and Flextronics International,
the documents said.
Kinnucan then sold the information to clients of his firm,
Broadband Research LLC, including hedge funds and money
managers, prosecutors said.
Barnetson provided confidential information about SanDisk
and Apple Inc, one of the companies SanDisk supplied
with electronic components.
Court documents said Barnetson told Kinnucan about SanDisk's
anticipated revenues in July 2010. Barnetson in September 2010
also told Kinnucan about negotiations to settle a legal dispute
between SanDisk and Apple, the papers said.
In exchange, Barnetson received the consultant's friendship,
meals at high-end restaurants and confidential information about
other technology companies, according to the charging documents.
Barnetson went on to cooperate in the investigation of
Kinnucan, who garnered attention in 2010 by publicly refusing to
cooperate with the federal government's insider trading probe.
Kinnucan ultimately pleaded guilty last year and was
sentenced in January to more than four years in prison.
Barnetson becomes the 50th person to be sentenced since
federal prosecutors in New York began filing a major wave of
insider trading case in October 2009.
To date, 81 people have been charged and 73 have been
Peter Leeming, a lawyer for Barnetson, did not immediately
respond to a request for comment.
The case is U.S. v. Barnetson, U.S. District Court, Southern
District of New York, No. 12-cr-00157.