Morgan Stanley says Joseph 'Chip' Skowron, the former hedge fund manager serving a five-year prison term for insider trading, should forfeit more than $31m in compensation for failing to fulfill his duties.
Bloomberg Business Week reports that Skowron managed Morgan Stanley’s FrontPoint Partners LLC until he was charged in 2011 with using inside information to avoid $30m in losses.
The bank sued Skowron after he pleaded guilty to conspiring to commit securities fraud and obstruct justice, and seeks to recover at least $33m it paid U.S. regulators.
Morgan Stanley has asked U.S. District Judge Shira Scheindlin in Manhattan to issue a partial summary judgment, or a ruling before trial. Morgan Stanley also seeks unspecified punitive damages for claims Skowron failed to faithfully discharge his responsibilities to his employer because of his insider trading.
'His faithlessness - insider trading and protracted concealment of that crime, both in violation of his core duties he owed the firm - permeated his employment', Kevin Marino, a lawyer for Morgan Stanley, said in a court filing. 'As a result, he must now repay all of the compensation he received during his faithless service'.
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