Although it has not been charged in the French Doc insider trading case, hedge fund manager FrontPoint Partners will lay off 28 non-investment employees after clients asked to redeem 40% of the firm’s $7.5 billion in assets (as of 11/1).  They received $3 billion in redemption requests.  About half of the redemption requests involved FrontPoint’s health-care hedge funds, which were closed and liquidated at the end of November.

    Investor Panic Attack.   What's spooking investors is a federal investigation into insider trading involving one of the firm's portfolio managers - Chip Skowron, co-portfolio manager of FrontPoint’s health-care funds.  U.S. Attorney Preet Bharara is handling the case.  The "tipper" is Dr. Yves Benhamou, a former adviser to Human Genome.  On 11/2, he was charged with insider trading and allegedly passing insider tips to  Mr. Skowron.  Mr. Skowron is leave pending outcome of the probe.  Neither FrontPoint nor Mr. Skowron has been charged with wrongdoing.

The letter said FrontPoint expects to close a series of direct lending funds this month with total capital commitments of more than $1 billion.   [Pensions & Investments,12/13]