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.


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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