Thursday, April 14, 2011

More Insider Trading - SEC Accuses Former Hedge Fund Manager

While the type and frequency of enforcement cases that are filed are largely under the control and selection of the SEC Staff, there have been a rash of insider trading cases in recent weeks.

Yesterday the SEC charged a former hedge fund portfolio manager with insider trading in a bio-pharmaceutical company based on confidential information about negative results of the company’s clinical drug trial.

The SEC alleges that Dr. Joseph F. “Chip” Skowron, a former portfolio manager for six health care-related hedge funds affiliated with FrontPoint Partners LLC, sold hedge fund holdings of Human Genome Sciences Inc. (HGSI) based on a tip he received unlawfully from a medical researcher overseeing the drug trial. HGSI’s stock fell 44 percent after it publicly announced negative results from the trial of Albumin Interferon Alfa 2-a (Albuferon), and the hedge funds avoided at least $30 million in losses.

http://www.sec.gov/news/press/2011/2011-91.htm

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