From today's Financial Times - the dirty part of Wall Street as a hedge fund portfolio manager who traded money for data from a French doctor involved in the clinical trials of HGS's Albuferon, waives indictment and plans to plead guilty.
Ex-FrontPoint manager waives indictment
By Kara Scannell in New York
Joseph “Chip” Skowron, a former hedge fund portfolio manager charged with allegedly trading on secret information he obtained from a French doctor, has agreed to waive an indictment, according to court documents, indicating an intention to plead guilty.
Mr Skowron of FrontPoint Partners was charged with securities fraud and obstruction of justice in April for allegedly trading shares of Human Genome Sciences after learning negative news about the clinical drug trial of Albuferon, a drug used in the treatment of hepatitis C.
More
On this story
* Regulator rebuffs plea on SAC Capital probes
* SEC settles over social media fundraising
* Fund manager latest to fall in inside trade push
* Senator presses regulator over SAC
* In depth Hedge funds
The doctor who served on the steering committee for the trial, Yves Benhamou, received envelopes stuffed with cash in exchange for the information, prosecutors say. He pleaded guilty in April to tipping off Mr Skowron. By trading, prosecutors allege, Mr Skowron avoided more than $30m in losses.
Prosecutors said in court documents that they would file a criminal information document following Mr Skowron’s agreement to waive an indictment, a move that is often taken when a defendant intends to plead guilty. Mr Skowron’s attorney could not be reached for comment.
The investigation, which first became known in November following the arrest of Mr Benhamou, proved too much for FrontPoint. The firm eliminated its healthcare investment team and assured investors it was not a target of the investigation. Nevertheless, investors eventually withdrew money and the fund has since wound down most of its operations. FrontPoint has not been accused of any wrongdoing.
Mr Skowron first met Mr Benhamou through his position as a consultant for Guidepoint Global, an expert network firm. Prosecutors said Mr Skowron convinced Mr Benhamou to provide him with secret information about the clinical trial.
Mr Skowron paid Mr Benhamou €5,000 in cash in a hotel room in Barcelona as a “present”, saying he was happy with their relationship, according to court filings.
According to prosecutors, Mr Skowron instructed Mr Benhamou to lie to FrontPoint’s lawyers about what they discussed during the calls after being notified that the Securities and Exchange Commission opened an investigation into the trading. Mr Skowron gave Mr Benhamou $10,000 in cash during a meeting in a hotel bar in Milan to keep quiet about the trades, prosecutors allege.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment