Saturday, 29 August 2015
Last updated 17 hours ago
Jan 28 2011 | 12:08pm ET
FrontPoint Partners has not been charged with any wrongdoing in the insider-trading case that has shaken the firm and forced it to jettison its healthcare business. But that isn't stopping some aggrieved shareholders from accusing it.
A group of Human Genome Sciences investors has sued the hedge fund, alleging that the firm used nonpublic information to skirt $30 million in losses in 2007 and 2008, losses that were borne by the company's other shareholders, they say. FrontPoint, which is in the process of liquidating its once-$1.5 billion healthcare fund, has agreed to halt distributions to investors until March 2 to allow a court to review the lawsuit.
As of November, FrontPoint said it had already returned 97% of the fund's assets, leaving about $45 million.
FrontPoint decided to close its healthcare fund and fired its entire healthcare team after the arrest of Yves Benhamou, a former adviser to Human Genome. According to prosecutors, Benhamou passed confidential information about an unfavorable drug trial on to an unidentified hedge fund manager, later revealed to be FrontPoint's Joseph Skowron. Like FrontPoint, Skowron has not been accused of any wrongdoing.
For its part, FrontPoint did not exactly deny the accusations in the lawsuit, filed in Connecticut federal court. Instead, the firm dismissed them as a "rehash of the allegations" in the federal complaint against Benhamou, the New York Post reports.
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…