Ex-FrontPoint Partners LLC hedge fund manager Joseph F. “Chip” Skowron pleaded guilty in a U.S. insider-trading case.
Skowron, a medical doctor, pleaded guilty yesterday to one count of conspiring to commit securities fraud and to obstruct a Securities and Exchange Commission investigation for trading on inside information about Human Genome Science Inc. and then lying to investigators.
“I knew my actions were wrong and I deeply regret my participation in these activities,” Skowron told U.S. District Judge Denise Cote in Manhattan yesterday. He faces as much as five years in prison when he’s sentenced Nov. 18.
“Dr. Skowron lied to and misled FrontPoint’s internal compliance team, the external counsel hired to independently investigate his actions, and the federal government,” FrontPoint said in a statement yesterday. “FrontPoint was never accused of any wrongdoing and has fully resolved this matter with the government.”
The government claimed that Skowron obtained nonpublic information from Yves Benhamou, an expert in hepatitis drugs and a former adviser for Human Genome Sciences. The tips, concerning hepatitis C drug trials, let Greenwich, Connecticut-based FrontPoint avoid more than $30 million in losses, the U.S. said.
Prosecutors claimed Skowron gave Benhamou more than $14,600 in cash and paid for hotel rooms and expenses. Benhamou has pleaded guilty.
As part of the plea agreement Skowron agreed to forfeit $5 million to the government.
The criminal case is U.S. v. Skowron, 11-MAG-00997; the civil case is Securities and Exchange Commission v. Benhamou, 10-cv-8266, U.S. District Court, Southern District of New York (Manhattan).
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