Thursday, 28 July 2016
Last updated 58 min ago
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.