Rabbi Milton Balkany, the rabbi who is currently pleading guilty to blackmailing Steve Cohen, is the whistleblower who heard from unknown sources that FrontPoint’s Chip Skowron sometimes traded on insider information.
In court today, according to Reuters, evidence was released that implicates Chip Skowron, the doctor who allegedly “tipped” Chip Skowron, Rabbi Milton Balkany, and SAC Capital in the same insider trading scandal.
The rabbi made his claims about improper trading by Skowron and FrontPoint in telephone calls with a federal investigator who was looking into the allegation that Balkany was trying to extort money from
Cohen, who prosecutors said did nothing wrong.
In transcripts of the phone calls, Balkany tells a federal investigator that he has heard FrontPoint’s Skowron sometimes received advance tips on the federal approval process for new drugs.
“This Skowron not only did it for himself, he sold it to others,” Balkany told a federal investigator, according to a transcript of one of the taped phone calls. “He’s still actively doing this. I
mean, he’s been doing it, for many years.”
In other words, two cases of insider trading that we’ve been hearing about and reporting on for months are connected, because of a Rabbi who apparently had no idea what he was doing.
It seems like this is what’s happened, if we’re wrapping our spinning head around it correctly.
Milton Balkhany heard something about both Chip Skowron and Steve Cohen. He tried to blackmail Steve Cohen saying he’d go public with the information – or else.
Then in the midst of a court case over blackmailing Steve Cohen, evidence of Balkany’s saying that he heard Chip Skowron had traded on information before emerged, and the two separate cases of insider trading became oddly intertwined.
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