FrontPoint Decries Skowron’s Insider-Trading

Aug 18 2011 | 12:06pm ET

FrontPoint Partners has spoken out in the wake of the guilty plea of the man whose involvement in an insider-trading scandal brought the once-$7 billion hedge fund to its knees.

Joseph Skowron admitted that he sold shares of Human Genome Sciences after learning from a French doctor, who advised the pharmaceutical, that a hepatitis-C drug trial had produced disappointing results. By dumping FrontPoint’s 3.3 million shares of the company before the news became public, Skowron, the hedge fund’s former top healthcare fund manager, saved FrontPoint some $30 million.

“Dr. Chip Skowron now admits that, through his individual actions, he willfully violated FrontPoint’s principles, compliance policies and the code of conduct he signed,” FrontPoint said in a statement issued to HedgeFund.net. “Dr. Skowron lied and misled FrontPoint’s internal compliance team, the external counsel hired to independently investigate his actions, and the federal government. FrontPoint was never accused of any wrongdoing and has fully resolved this matter with the government.”

Despite that, FrontPoint investors headed for the exits; in May, the firm announced that it would wind down most of its hedge funds, including its flagship strategy.


In Depth

Q&A: George Schultze On His Fund's Unique Approach to Distressed Investing

Apr 16 2015 | 1:01am ET

George Schultze is a managing member of Schultze Asset Management, a long/short...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note