At this point, U.S. attorney Preet Bahara must be running out of places to store all those "scalps." His office arrested former FrontPoint Partners hedge-fund manager Dr. Joseph "Chip" Skowron III today on the charge of insider trading. Skowron's arrest follows a guilty plea from Dr. Yves Benhamou, a former adviser to Human Genome Sciences. Benhamou leaked insider information about the Human Genome's experimental hepatitis-C drug Albuferon, helping FrontPoint avoid $30 million in losses. Good ol' Chip, a 41-year-old blond with the kind of patrician features that look like they should be etched on a coin, launched his Greenwich, Connecticut-based hedge fund after graduating with a medical degree in cellular biology from Yale and following a five-year orthopedic residency at Harvard. Hey, that membership to the Monticello Motor Club to drive your blue Ferrari 458 and black Porsche Cayenne next to Jerry Seinfeld doesn't just pay for itself.
Morgan Stanley acquired FrontPoint in 2006 and spun it off last month, a move that was started before Benhamou's insider-trading investigation.
Since being suspended from FrontPoint last year, Chip has focused on his volunteer work. He was forced to step down as national director of AmeriCares, a nonprofit that provides disaster relief and medical care to HIV-positive children. But in the past, Skowron has said he carries around a photo of himself with a 6-year-old boy whose legs he saved in an operating room in Kosovo. He told Absolute Return Alpha magazine:
"I remember crying tears of joy. He was smiling and happy. That was all the thanks I needed."
See, that's what a jury likes to hear. Maybe instead of allegedly faking an e-mail trail, Raj Rajaratnam can figure out how to Photoshop himself into images of disaster relief.
FrontPoint Partner’s Skowron Charged With Securities Fraud [Bloomberg]
FACTBOX-Facts about two doctors in insider trade case [Reuters]
Meet Chip Skowron: The Health-Care Fund Manager At The Center Of The FrontPoint Insider Trading Scandal [BI]
Related: The Next Best Crooks [NYM]
Update: True to his Roman-numeral pedigree, Skowron III showed polite discretion in handing over thousands of dollars in alleged payoff to his alleged co-conspirator. According to the complaint, Chip met Benhamou in classy joints, like a hotel bar in Milan or a hotel suite in Barcelona to hand over envelopes of cash. On one occasion, he paid Benhamou's $4,624 hotel bill in Manhattan. Skowrons I and II would be so proud. [Dealbreaker]