US financial firm Morgan Stanley has sued a former employee convicted for insider trading scheme in order to recover $33m, which it claims to have paid to the US Securities and Exchange Commission (SEC) to settle the civil case associated with the fraudulent activities.
The lender has filed a case with the Manhattan federal court, and sought recovery of the amount from the ex-FrontPoint Partners hedge fund manager Joseph"Chip" Skowron, reported Reuters.
Additionally, the bank sought for unspecified compensation and punitive damages.
In August 2008, Skowron acknowledged of being guilty for trading the stock ofHuman Genome Sciences after receiving non-public information from the biotech company's consultant.
The bank in the complaint claimed that it defended themanager based on the facts provided by the accused that he had not breached the regulation.
The US bank, which purchased FrontPoint in 2006, wanted to recover approximately $45m from the hedge fund manager, but in a March ruling, a judge said that it cannot recover the payment made to the SEC.
Instead, Skowron was ordered to pay $10.2m as compensation to the bank.
