Ex-FrontPoint Manager Skowron In Plea Talks

Jun 22 2011 | 10:29am ET

Joseph Skowron, the former FrontPoint Partners portfolio manager whose involvement in an insider-trading case has brought his former firm to its knees, is in plea talks with federal prosecutors.

The talks between Skowron, who was criminally charged in April, just days after his alleged tipster, French doctor Yves Benhamou, pleaded guilty, and the U.S. Attorney’s Office in New York are continuing, a prosecutor wrote in a court filing earlier this month.

“Counsel for the defendant and I have had ongoing discussions regarding a possible disposition of this case,” Assistant U.S. Attorney Pablo Quinones wrote. On the same day, U.S. Magistrate Judge Debra Freeman granted prosecutors a one-month extension to win an indictment against Skowron, who is currently free on bail. Such extensions are usually granted in expectation of a plea agreement.

According to prosecutors, Benahmou warned Skowron that a hepatitis-C drug trial run by Human Genome Sciences, which Benhamou served as a consultant, had produced disappointing results. FrontPoint sold 3.3 million shares of Human Genome in January 2008, before the company announced those results, saving it some $30 million in losses.

FrontPoint shut down Skowron’s healthcare hedge funds shortly after Benhamou was charged last year. But the quick action failed to assuage investors, who continued to pull billions from the embattled firm, which announced last month that it would close all but four of its hedge funds, including its flagship multi-strategy fund.

Word of Skowron’s plea talks comes just days after Winifred Jiau, formerly of expert-network Primary Global Research, was convicted of selling confidential information to hedge funds. That guilty verdict was the fifth won by federal prosecutors this year, following those against Galleon Group founder Raj Rajaratnam and three others charged in the Galleon case. If Skowron pleads out, he’ll join dozens of others charged in the Galleon and Primary Global cases to do so.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note