The fall of FrontPoint

An insider trading debacle has brought the firm to its knees, but its highly touted model showed flaws from the start.

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Portfolio manager Joseph “Chip” Skowron
Illustration by Andrea Ventura

When Phil Duff, Gil Caffray and Paul Ghaffari launched FrontPoint Partners in November 2000, they hoped to create a hedge fund firm so diversified it would be impervious to a single manager’s blowup and so well-managed it could track every trade for undue risk.

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