On Friday, the Federal Bureau of Investigation arrested one of the industry’s most vocal critics about insider trading, research analyst John Kinnucan. He has been accused of trading corporate secrets with hedge funds for cash, reported The New York Times.

What’s interesting about Kinnucan is his vocal challenges about the government’s investigation of Wall Street’s insider trading.

Can you say Karma?

The Oregon-based analyst had been arrested on Thursday at his home. His insider trading tips supposedly came from technology company executives such as ones from SanDisk. With the information, Kinnucan gave his sources expensive thank you gifts including ski trips, nice meals and cash, according to the government’s investigation.

The government’s complaint includes information that Kinnucan had been paid about $30,000 every quarter from two hedge funds, who then traded on the insider information. What’s different about this case, Kinnucan hid his actions as legitimate research, telling clients the information did not encompass actions from illegal insights.

In addition, the complaint alleges that Kinnucan regularly went to an inside source from the technology company F5 Networks. The two probably had a tight relationship as Kinnucan shared his beach house with this person.

On July 2, 2010, the unnamed source gave Kinnucan a heads-up about F5 Networks upcoming quarterly earnings; he then shared this information with his hedge fund clients. These unnamed entities were from California and Texas and subsequently they bought stock prior to the company’s public earnings report.

Janice K. Fedarcyk, assistant director-in-charge of the Federal Bureau of Investigation said, “Kinnucan’s company, Broadband Research, was a misnomer. It was inside information Kinnucan bought from company insiders. That kind of information beats research every time.”

Adding to an already bad week for Kinnucan, on Friday, the Securities and Exchange Commission filed a duplicate action against him. Its case includes the same sources and information sharing the Justice Department has reviewed.

Robert Khuzami, the director of the S.E.C.’s division of enforcement, said of the case, “Obtaining important and unreported financial results from company insiders and selling that information to hedge funds is not legitimate expert networking services — it’s old-fashioned insider trading.”

The government’s case against Kinnucan has been strengthened through wiretaps, phone records, instant message conversations and cooperating witnesses, according to The New York Times.

In the list of witnesses, Donald Barnetson, a senior SanDisk director, is likely to plead guilty on Friday in the Federal District Court in lower Manhattan. He allegedly gave Kinnucan private corporate information about SanDisk’s  negotiations with Apple.

The web thickens for Kinnaucan as the government has alleged that he invested in a start-up with Barnetson.

Noting another company involved in Kinnucan’s network was Flextronics. Last year an employee plead guilty to giving company tips to Kinnucan. The government has also alleged that he obtained tips from a source at Omnivision.

Federal Agents Visit Kinnucan in 2010

The case against Kinnucan had been building since late 2010. Federal agents visited Kinnucan at his home then and asked for his cooperation in an investigation that included several of his hedge fund clients. Kinnucan hesitated and then warned his clients in an email.

In the ensuing months, Kinnaucan spoke to many media outlets about the visit and the government’s actions while defending himself.

He did not like the agent’s actions, showing up at his home, but by cooperating with them it would violated his principles.

In the end, maybe it could have helped the case against him.