The hedge-fund firm, not named in yesterday's parallel criminal and civil complaints against Yves M. Benhamou, 50, the Paris-based doctor accused of tipping insider information, is FrontPoint Partners, currently owned by Morgan Stanley.  The doctor allegedly tipped the hedge-fund manager with confidential information in late 2007 and in early 2008, enabling the fund to avoid $30 million of losses by selling shares in Human Genome Sciences Inc. ahead of negative news about the company's trial of a drug for Hepatitis C, the liver disease.

    Not Named in Complaint.   Neither the hedge-fund firm nor the bank is named as a defendant in the cases, brought in Manhattan by the U.S. Attorney's office and the SEC.  The SEC complaint said a portfolio manager at the hedge-fund group who got information from Dr. Benhamou "knew or should have known" that the doctor owed a "duty of confidentiality" to the drug company.

    FrontPoint Partners.   A spokesperson for Morgan Stanley confirmed the relationship, and noted that the firm is in the process of spinning off FrontPoint.  "No Morgan Stanley executives outside of FrontPoint managers were the subjects of this SEC investigation."  M. Stanley doesn't expect the legal issues to hamper plans for FrontPoint to become independent.

Chip Skowron, a doctor who's one of 2 overseers of FrontPoint's health-care investments, has been placed "on leave pending the outcome of the investigation," in which the firm was "cooperating fully."  The trades discussed in the complaints aren't the only FrontPoint trades involving health-care companies that regulators have probed.  The SEC reportedly also investigated other trading in health-care stocks overseen by FrontPoint investment managers including Dr. Skowron, as recently as this year. 

For further details on the investigation, refer to C-I's WWW Blog, 11/2.   [WSJ, 11/3]