Monday, 28 July 2014
Last updated 2 days ago
Nov 3 2010 | 3:03am ET
FrontPoint Partners is the, until now, unidentified hedge fund that allegedly received inside information from a French doctor charged yesterday by U.S. authorities.
According to the Securities and Exchange Commission's complaint, Yves Benhamou used his position as an adviser to pharmaceutical company Human Genome to pass confidential information on the results of a hepatitis-C drug trial to at least six hedge funds. Those six hedge funds sold 6 million shares of Human Genome in December 2007 and January 2008 while in possession of confidential, negative information about those drug trials, the SEC said.
FrontPoint, which is being spun off from Morgan Stanley, sold all 3.3 million shares of Human Genome it owned in the first quarter of 2008, although it is unclear when the hedge fund sold those shares. Human Genome broke the bad news about the drug testing on Jan. 23, 2008, sending its stock price plummeting 44%.
FrontPoint has not been charged with any wrongdoing, although it has placed Chip Skowron, the co-portfolio manager of its health care hedge funds, on leave until the investigation is resolved. FrontPoint said it was "cooperating fully" with the authorities.
Benhamou was arrested on Monday in Boston on two criminal charges.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…