The Securities and Exchange Commission (SEC) has amended its complaint in its insider trading action against Dr. Yves M. Benhamou to name Joseph F. “Chip” Skowron III as an additional defendant. Skowron allegedly traded on inside information provided by Benhamou about the results of a clinical trial of a hepatitis drug manufactured by Human Genome Sciences, Inc. (HGSI). Skowron had served as portfolio manager for six funds sponsored by hedge fund manager FrontPoint Partners LLC. Benhamou is a doctor who was on a steering committee overseeing a clinical trial of HGSI’s drug Albumin Interferon Alfa 2-a. The U.S. Attorney for the Southern District of New York has brought parallel criminal insider trading charges against Skowron based in large part on the testimony of Benhamou, who has already pleaded guilty to similar charges and is now a cooperating witness. We provide a detailed summary of the amended complaint. For a summary of the SEC’s original complaint, which referred to Skowron only as “Co-Portfolio Manager 1,” see “SEC and DOJ Commence, Respectively, Civil and Criminal Insider Trading Actions Against a Doctor Who Allegedly Tipped Off a Hedge Fund Manager to Impending Negative Information About a Drug Trial
,” Hedge Fund Law Report, Vol. 3, No. 44 (Nov. 12, 2010).