Morgan Stanley sues Ex-FrontPoint manager over insider charges
November 10, 2012 2:28 PM EST
In a complaint filed in Manhattan federal court on October 31, Morgan Stanley sued ex-FrontPoint Partners hedge fund manager Joseph "Chip" Skowron over the funds the bank paid to the U.S. Securities and Exchange Commission. The lawsuit also called for unspecified compensatory and punitive damages.
Doctor-turned-stock picker Skowron pleaded guilty in August to trading stock of Human Genome Sciences Inc in 2008 based on non-public information he admitted to having received from a consultant for the biotech company, who also pleaded guilty to insider trading charges.
Skowron was sentenced to five years in prison and ordered to forfeit $5 million.
"Beyond the harm attendant to having one of its managing directors plead guilty to serious criminal conduct, the firm expended its own reputational capital by defending Skowron during the years it believed, based entirely on his misrepresentation, that he had not violated the law," the complaint said.
Morgan Stanley - which acquired FrontPoint in 2006 - had sought nearly $45 million from Skowron over his fraud, but a U.S. judge in March said the bank was not entitled to recoup the $33 million SEC payment.
Manhattan federal court judge Denise Cote instead ordered Skowron to pay $10.2 million in restitution to his former employer. Skowron has appealed that order.
Lawyers for Morgan Stanley and for Skowron did not immediately return calls seeking comment.
(Reporting By Basil Katz; Editing by Michael Perry)
Most Popular Slideshows
- Slow-Moving Yet Unrelenting Hawaii Lava Now Only Inches Away From Pahoa Homes
- Kate Middleton Expecting A Baby Boy For The Second Time Around – Reports [PHOTOS]
- 2014 MLB World Series Game 6: Kansas City Royals 10, San Francisco Giants 0 [PHOTOS]
- San Francisco Giants Beat Kansas City Royals, 3-2 In Game 7, Wins 2014 MLB World Series [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- NATO: Russia's Been Conducting Too Many Military Flights Over Europe
- Moto X 2014 vs. Motorola DROID Turbo - Specifications, Features And Price Showdown
- Dismantling Of Fukushima Reactor 1 Faces Delays, US Judge Gives Sailor Go Signal To Push Through Lawsuit Against TEPCO Over Radiation
- Samsung Galaxy Note Edge To Be Available Through T-Mobile In The US
- Five Extreme Drop Tests On BlackBerry Passport Reveals Its Endurance [Watch Video]
- Updated iOS 8 Pangu Untethered Jailbreak Now Fully Works with Cydia: Key Fixes & Mods to Expect
- Ex-Ohio Trooper Pleads Guilty To Issuing Sex as Penalty To Women Motorists