Harvard Doctor turns hedge fund profiteer, then, convict – after sentence for insider trading

From the age of six, Joseph F. “Chip” Skowron III aspired to be a doctor. At Yale, he earned both a medical degree and a doctorate in molecular and cellular biology, then qualified for Harvard’s elite, five-year residency program. Three years in, Skowron quit medicine for Wall Street. He and two partners started a group of health-care investment funds under the auspices of FrontPoint Partners LLC, a hot new property in the exploding world of hedge funds.

Skowron was soon making millions of dollars a year. He built a gabled, 10,000-square-foot home on three acres in the nation’s hedge-fund capital, Greenwich, Connecticut. He assembled a small fleet of pricey cars, including a 2006 Aston Martin Vanquish and a 2009 Alfa Romeo Spider 8C. He also spent vacation time engaged in Third World humanitarian causes…

Today, Skowron…is serving a five-year term for insider trading at the federal prison at Minersville, Pennsylvania. At FrontPoint, Skowron lied to his bosses and law enforcement authorities, cost more than 35 people their jobs and stooped to slipping envelopes of cash to an accomplice. FrontPoint is gone. Morgan Stanley, which once owned FrontPoint, is seeking more than $65 million from Skowron, whose net worth a year ago was $22 million. Until he’s a free man, his wife of 16 years will have to care for their four children and Rocky, their golden retriever, on her own…

Health care has become America’s sweet spot for insider traders like Skowron. Among researchers, physicians, government officials and corporate executives, the lure of easy money in health-care insider trading has become epidemic. Since 2008, about 400 people were sued by regulators or charged with insider trading; of those, at least 94 passed or received tips involving pharmaceutical, biotechnology or other health-care stocks.

RTFA for the cautionary tale of humanitarian physician – turned scumbag profiteer, insider trader on Wall Street.

Hedge fund was “feeder” for $7 billion to Madoff fraud

A US hedge fund, Fairfield Greenwich, has been charged with fraud for pumping nearly $7 billion of its clients’ money into Bernard Madoff’s corrupt investment empire with “total disregard” for any checks on the renegade financier’s activities.

The action, by Massachusetts’ securities regulator, is the first to be taken against any of the so-called “feeder funds” that channelled billions of dollars in the direction of Madoff, who was jailed last month…

The Fairfield Greenwich hedge fund caught up in the scandal is run by Walter Noel, a high-profile New York society figure whose glamorous family was once described by Vanity Fair magazine as “shoring up the virtues of a nearly extinct aristocracy”.

Charges filed by Massachusetts’ secretary of state, William Galvin, said 95% of the firm’s $7.2bn Sentry fund was invested with Madoff, who admitted in court last month that he had barely done any genuine trading for nearly two decades.

Through a 1% commission fee, Fairfield earned $100m a year from pushing money in Madoff’s direction.

Galvin’s charges said: “They were blinded by the fees they were earning, did not engage in meaningful due diligence and turned a blind eye to any fact that would have burst their lucrative bubble.”

Crooks paying commissions to crooks surely sounds like conspiracy.