According to the New York Post, the lawsuit alleges that FrontPoint illegally earned $30 million at the expense of HGSI shareholders when Skowron allegedly traded on tips that a French doctor had passed on to him.
Though FrontPoint hasn’t been charged with any wrondoing, the hedge fund has experienced billions in redemptions and was forced to close its healthcare portfolio. Skowron was fired in December, along with the rest of his team.
The hedge fund has halted withdrawls on any remaining cash in the healthcare portfolio until March 2 while the court reviews the case.
It’s clear that the Skowron scandal continues to have a ripple effect on the entire fund, with one of the firm’s star PM’s, Steve Eisman, reportedly irritated by the “drag” the incident has had on his own fund.