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Ex-Hedge Fund Manager, a Doctor, Admits Insider Trading
Posted By David Stout On August 16, 2011 @ 1:06 pm In News | Comments Disabled
A former hedge fund portfolio pleaded guilty on Monday to insider trading, admitting in federal court that he acted on information not yet public so that his fund could escape big losses.
Joseph F. “Chip” Skowron III, 42, who once worked for FrontPoint Partners LLC and is also a doctor, pleaded guilty in Manhattan less than a year after the charges that rocked the hedge fund first surfaced, The New York Times reported . Skowron admitted that he avoided $30 million in losses by trading on data leaked by a consultant for an expert network about the results of a clinical drug trial.
Skowron also admitted that he and the consultant, Dr. Yves Benhamou, had agreed to mislead the Securities and Exchange Commission. “I knew my actions were wrong, and I deeply regret participating in these activities,” Skowron said in court, according to The Times. He faces up to five years in prison and will pay a $5 million fine for for the one count of conspiracy to commit securities fraud and obstruct justice to which he pleaded. He is to be sentenced Nov. 18.
As recounted by Main Justice in April, Benhamou, an internationally recognized expert in liver diseases, pleaded guilty earlier and agreed to cooperate in the investigation. The guilty plea by Skowron is the latest victory for Preet Bharara, the U.S. Attorney for the Southern District of New York, who has made Wall Street crime a priority.
According to The Times, FrontPoint, which was never accused of any wrongdoing, said: “Dr. Skowron lied to and misled FrontPoint’s internal compliance team, the external counsel hired to independently investigate his actions, and the federal government.”
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