Insider traders like Joseph F. “Chip” Skowron III must be held responsible for the harm they cause their employers, Morgan Stanley lawyers told an appeals court in a bid to recover $10.2 million, Bloomberg News reported yesterday. Skowron, who is serving five years in prison, was a hedge fund manager at Morgan Stanley’s FrontPoint Partners LLC until he was charged in April 2011 with using inside information to avoid $30 million in losses. The U.S. Court of Appeals in Manhattan heard arguments yesterday in Skowron’s appeal of a judge’s order that he pay $10.2 million in restitution to the New York-based bank, which closed FrontPoint after the scandal. Morgan Stanley and prosecutors argued in support of the judge’s order, saying that he hid his activities from his employer and the government.
