Tuesday, 28 June 2016
Last updated 36 min ago
Nov 17 2010 | 12:45pm ET
Yves Benhamou, the French doctor accused of passing inside information to hedge fund FrontPoint Partners, won bail today for the first time since his arrest more than two weeks ago.
U.S. Magistrate Judge Frank Maas set bail at $3 million. Benhamou—who lives in France—will be placed under "house" arrest in the U.S. and will have to surrender his passport. His bond must be secured by $1 million in cash or property in the U.S. and he must find three co-signers for his bond.
Benhamou remains in jail until the bail conditions are met.
Benhamou was arrested at a nephrology conference and charged with using his position as an adviser to pharmaceutical company Human Genome Sciences to pass advanced information about a disappointing drug trial to six hedge funds. FrontPoint, which has not been accused of any wrongdoing in the case, acknowledges that it is one of them and has placed Joseph Skowron, its lead healthcare fund manager, on leave pending the conclusion of the investigation.
FrontPoint allegedly escaped $30 million in losses with Benhamou's information.
Prosecutors had argued against granting Benhamou bail, noting that he is a millionaire with ample means and motivation to flee. They also pointed out that the U.S. and France do not have an extradition treaty—even citing the case of famed film director Roman Polanski, who has been a fugitive from U.S. justice living in France for more than 32 years.
Benhamou faces up to 25 years in prison if convicted.
Benhamou's lawyer countered with letters from doctors and patients pleading for Benhamou's freedom. David Zornow said his client, who denies any wrongdoing, wants the freedom to continue treating his patients.
"It would be truly tragic to have this man with his knowledge sitting in prison when he could be helping people," Zornow said.