NEW YORK (Reuters) – Bernard Madoff — the architect of history’s biggest Ponzi scheme — and Gary Ridgway – the Green River killer — would seem to have little in common aside from being branded as “monsters” in the tabloids.

But a team of FBI agents, the same ones who specialize in helping local police track down serial killers like Ridgway, are using their expertise in behavioral profiling to target white collar criminals like Madoff.

For about two years now, agents with the Federal Bureau of Investigation’s Behavioral Analysis Unit have been consulting with their colleagues in New York who specialize in securities fraud detective work. The BAU agents are going over the case files put together by the FBI for Madoff and other convicted scammers like Bayou Group’s Samuel Israel, whose $400 million hedge fund turned out to be Ponzi scheme, and former Democratic fundraiser Hassan Nemazee, who stole nearly $300 million from Citigroup and two other big banks.

The hope is the BAU agents, whose work in profiling serial killers has been popularized in books, movies and on TV, can get into the minds’ of fraudsters and see what makes them tick.

In cinematic terms, substitute Gordon Gekko, the insider trader in “Wall Street,” for Hannibal Lecter, the cannibalistic serial killer in The Silence of the Lambs, and you get an idea of what the FBI is trying to do.

“This originally started out as an attempt to find a way to prevent and detect Ponzi schemes,” said Peter Grupe, the FBI’s assistant special agent in New York in charge of white collar investigations. “But it developed into something broader.”

The FBI’s profiling strategies are part of an aggressive new approach to financial crimes. Facing widespread criticism over the lack of criminal cases stemming from the financial crisis, the FBI and federal prosecutors are keen on showing that they are not soft on white collar offenses.

NEW YORK/BOSTON (Reuters) – An Ivy League-trained doctor-turned-stock-picker has been charged with insider trading, accused of showering a French physician with cash and a luxury trip to New York in exchange for secret details on a biotechnology company.

Joseph “Chip” Skowron, who ran hedge fund firm FrontPoint Partners’ healthcare funds, was expected to appear later Wednesday in federal court on criminal securities fraud and conspiracy charges. The FBI said he surrendered Wednesday morning in Manhattan.

The 41-year-old Connecticut man is one of the most prominent investors to become embroiled in a crackdown on illegal stock tips solicited from consultants working for so-called expert network firms, which help hedge funds obtain information about public companies in areas such as medicine and technology.

The case, which began with the arrest last year of the French doctor, has dealt a blow to FrontPoint, forcing it to shutter Skowron’s $1.5 billion funds. Skittish investors pulled money out of other FrontPoint portfolios as well, removing $3 billion and shrinking the firm’s assets to about $4.5 billion.

Prosecutors contend that Skowron, whose resume was filled with prominent schools and employers, skirted the hedge fund’s own rules against insider trading by setting up a side deal starting in 2007 with Yves Benhamou, 51, an infectious disease expert from Paris who was a consultant to both a biotech company and an expert networking firm.

Benhamou pleaded guilty on Monday to securities fraud, admitting he illegally provided tips about biotech company Human Genome Sciences Inc to Skowron, according to court papers unsealed on Wednesday. He also pleaded guilty to charges of conspiracy and making false statements to the FBI after his arrest, according to the court documents.

“When Chip Skowron needed inside information, Dr. Benhamou was always on call,” said Manhattan U.S. Attorney Preet Bharara. Based on the tip Benhamou fed to Skowron, his funds avoided $30 million of losses by selling their Human Genome stake before the company on Jan. 23, 2008, revealed problems with its experimental hepatitis C treatment. Human Genome shares fell 44 percent that day.

NEW YORK/BOSTON (Reuters) – A former manager at hedge fund FrontPoint Partners LLC has been charged with insider trading, accused of showering a French doctor with cash and a luxury trip to New York in exchange for secret details on a biotechnology company.

Joseph “Chip” Skowron, who ran FrontPoint’s healthcare funds, was expected to appear later Wednesday in federal court on criminal securities fraud and conspiracy charges. The FBI said he surrendered Wednesday morning in Manhattan.

The Connecticut man is one of the most prominent traders to become embroiled in a crackdown on illegal stock tips solicited from consultants working for so-called expert network firms, which help hedge funds get information about public companies in areas such as medicine and technology.

The case, which began with the arrest last year of the French doctor, has been a huge blow to FrontPoint, forcing it to shutter Skowron’s $1.5 billion funds. FrontPoint has not been accused of wrongdoing.

Prosecutors contend that Skowron, a doctor-turned-stock picker, skirted the hedge fund’s own rules against insider trading by setting up a side deal starting in 2007 with Yves Benhamou, an infectious disease expert from Paris who was a consultant to both a biotech company and an expert networking firm.

Benhamou pleaded guilty on Monday to securities fraud, admitting he illegally provided tips about biotech company Human Genome Sciences Inc to Skowron, according to court papers unsealed on Wednesday. He also pleaded guilty to charges of conspiracy and making false statements to the FBI after his arrest, according to the court documents.

Prosecutors said FrontPoint, based on the tip fed to Skowron, avoided $30 million of losses by selling its Human Genome stake before the company on Jan. 23, 2008, revealed problems with its experimental hepatitis C treatment. Human Genome shares fell 44 percent that day.

NEW YORK/BOSTON (Reuters) – A former manager at hedge fund FrontPoint Partners LLC has been charged with insider trading, accused of showering a French doctor with cash and a luxury trip to New York in exchange for secret details on a biotechnology company.

Joseph “Chip” Skowron, who ran FrontPoint’s healthcare funds, was expected to appear later Wednesday in federal court on criminal securities fraud and conspiracy charges. The FBI said he surrendered Wednesday morning in Manhattan.

The Connecticut man is one of the most prominent traders to become embroiled in a crackdown on illegal stock tips solicited from consultants working for so-called expert network firms, which help hedge funds get information about public companies in areas such as medicine and technology.

The case, which began with the arrest last year of the French doctor, has been a huge blow to FrontPoint, forcing it to shutter Skowron’s $1.5 billion (922.2 million pounds) funds. FrontPoint has not been accused of wrongdoing.

Prosecutors contend that Skowron, a doctor-turned-stock picker, skirted the hedge fund’s own rules against insider trading by setting up a side deal starting in 2007 with Yves Benhamou, an infectious disease expert from Paris who was a consultant to both a biotech company and an expert networking firm.

Benhamou pleaded guilty on Monday to securities fraud, admitting he illegally provided tips about biotech company Human Genome Sciences Inc (HGSI.O: Quote, Profile, Research) to Skowron, according to court papers unsealed on Wednesday. He also pleaded guilty to charges of conspiracy and making false statements to the FBI after his arrest, according to the court documents.

Prosecutors said FrontPoint, based on the tip fed to Skowron, avoided $30 million of losses by selling its Human Genome stake before the company on January 23, 2008, revealed problems with its experimental hepatitis C treatment. Human Genome shares fell 44 percent that day.

NEW YORK/BOSTON (Reuters) – A former manager at the hedge fund FrontPoint Partners LLC has been charged with insider trading, becoming the most prominent investor embroiled in a crackdown on illegal stock tips solicited from so-called expert network industry consultants.

Chip Skowron, a doctor who ran healthcare-oriented hedge funds, was expected to appear later Wednesday in federal court on criminal securities fraud and conspiracy charges, a person familiar with the matter said. The FBI said he had surrendered to federal authorities in Manhattan.

The case comes as the insider trading trial of Galleon Group hedge fund manager Raj Rajaratnam nears its conclusion, also in Manhattan federal court.

Skowron’s case stems from November’s arrest of French doctor Yves Benhamou, the person familiar with the case said.

Benhamou, an expert in infectious disease who worked as a consultant for drug maker Human Genome Sciences Inc, has admitted to illegally providing tips to Skowron, according to court papers unsealed on Wednesday.

He also has pleaded to securities fraud, conspiracy and making false statements to the FBI after his arrest, according to the court documents.

At the time Benhamou was working with Human Genome, he also served as a paid consultant with Guidepoint Global, an expert network firm that matches hedge funds with industry analysts in medicine, technology and other fields.

BOSTON/NEW YORK, April 11 (Reuters) – Hedge fund manager David Einhorn is coming up short this year largely because some of the bets he made on stocks falling haven’t panned out.

In the first quarter, Einhorn’s Greenlight Capital Qualified LP dipped 2.9 percent, compared to an average 2 percent gain for the hedge fund industry.

A Greenlight investor said the New York-based hedge fund firm underperformed because its so-called short positions, where investors bet that the stock price will drop, lost 9.2 percent in value during the period.

By contrast, the fund’s bet on stocks and other assets rising in value performed well, increasing 6.7 percent. Part of Einhorn’s long portfolio has included gold, the kind you can touch, and bets on BP (BP.L: Quote, Profile, Research, Stock Buzz) and Vodafone Group (VOD.L: Quote, Profile, Research, Stock Buzz). Fund managers will not be releasing their first-quarter holdings until mid-May.

A spokesman for the fund firm declined to comment.

While Einhorn, who has been managing money since 1996 and has returned an average 20 percent to investors a year, does not say which companies he is shorting, it is highly likely that much of this year’s pain came from Florida real estate company The St. Joe Co (JOE.N: Quote, Profile, Research, Stock Buzz).

Only six months ago Einhorn, who was among the first to bet against now-bankrupt investment house Lehman Brothers, made a very public call against St. Joe at the annual Value Investing Congress in New York.

NEW YORK/BOSTON (Reuters) – Billionaire hedge fund investor Philip Falcone may have found a way out of his risky wireless telecom bet through a possible initial public offering, three sources said.

LightSquared, the upstart telecom backed by Falcone’s hedge fund, could file for an IPO as early as this summer, said one person familiar with the matter. It has been meeting with Wall Street telecom analysts and institutional investors to discuss its business plan.

A LightSquared spokeswoman declined to comment on the matter, saying the company does not discuss “rumors.”

Falcone has staked the future of his Harbinger Capital Partners hedge fund on LightSquared, which is hoping to build a nationwide high speed wireless communications network by 2015.

About half of Harbinger’s $6 billion of capital has been poured into LightSquared, and an initial public offering for the company could be the beginning of Falcone’s exit from the investment. An IPO would be one way for Harbinger to cash-in its significant equity stake and begin returning money to the hedge fund’s investors.

Just last week, LightSquared executives met in New York with a telecom analyst from Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and representatives from several mutual funds, said three analysts familiar with the situation. The meetings were held at LightSquared offices in Manhattan, located in the same building as Harbinger. LightSquared is based in Reston, Virginia.

A Morgan Stanley spokeswoman declined to comment.

BOSTON/NEW YORK, April 8 (Reuters) – The daily cup of coffee has worked wonders for hedge fund manager John Thaler’s returns this year.

Thaler, who runs the roughly $1 billion JAT Capital Management, pulled off a dramatic coup when his New York-based firm outperformed much bigger and better known stock pickers to rank as the industry’s best performer in the first quarter.

Armed with a sterling pedigree and taste mainly for media and technology companies, Thaler ranked as the the world’s best performing hedge fund manager during the first three months of 2011, recent statistics from HSBC Private Bank show.

A spokesman for his fund declined to comment.

Since hedge funds are not required to report their performance figures it impossible to know whether Thaler was the absolute top performer. But for most investors and industry analysts the HSBC list carries tremendous weight, especially since many industry super stars are among the hundreds of managers whose performance is tracked monthly.

And the investment that fueled Thaler’s rise to the top this year? The world’s unquenchable thirst for one, two or three cups of joe a day. Thaler gulped down 4.1 million shares of Green Mountain Coffee Roasters Inc (GMCR.O: Quote, Profile, Research, Stock Buzz) starting late last year, regulatory filings show. Thaler’s next largest position is Chinese search engine Baidu Inc (BIDU.O: Quote, Profile, Research, Stock Buzz) followed by Netflix (NFLX.O: Quote, Profile, Research, Stock Buzz), the on demand movie company.

Now valued at $268 million, Green Mountain Coffee has paid off like no other for the little-known firm as the company’s stock price surged 97.81 percent since January. Speculation that industry titan Starbucks (SBUX.O: Quote, Profile, Research, Stock Buzz) might buy Green Mountain and a deal where the company will offer Dunkin’ Donuts Coffee in single cups helped push the stock price up.

NEW YORK (Reuters) – A corporate lawyer and a trader were charged Wednesday with running a 17-year conspiracy to trade on corporate merger secrets stolen from three of the nation’s most prominent law firms, in one of the largest U.S. insider trading cases on record.

Matthew H. Kluger, who until last month was a lawyer at Wilson Sonsini Goodrich & Rosati PC, and the trader Garrett D. Bauer were accused of reaping more than $32.2 million of illicit profit by trading on tips about upcoming mergers and acquisitions.

In a complaint filed with the federal court in Newark, New Jersey, prosecutors said Kluger, 50, passed tips to an unnamed co-conspirator about mergers such as Oracle Corp’s takeover of Sun Microsystems Inc and Adobe Systems Inc’s takeover of Omniture Inc.

The co-conspirator would then tip Bauer, 43, who would make trades for all three of them based on the inside information, prosecutors said. Kluger also passed tips from his earlier jobs at Cravath Swaine & Moore LLP and Skadden, Arps, Slate, Meagher & Flom LLP, they added.

“According to the complaint, the defendants exploited Kluger’s access to sensitive, confidential information to make trading profits a sure thing,” U.S. Attorney Paul Fishman in New Jersey said. “This kind of cheating corrodes confidence in our markets and swindles those who play by the rules.”

Bauer worked at a variety of trading firms, including at Lighthouse Financial Group from about June 2009 to August 2010, prosecutors said.

Kluger lives in Oakton, Virginia, while Bauer lives in New York. The U.S. Securities and Exchange Commission filed related civil charges against the men.

NEW YORK (Reuters) – The richest 25 hedge fund managers made a bit less money last year. But don’t cry too hard. Collectively, this privileged class of traders did quite well for itself — raking in some $22 billion in compensation, according to AR Magazine.

Topping the charts in hedge fund pay was John Paulson, who reportedly earned $4.9 billion. Paulson’s name at the top of the “rich list” isn’t too surprising, given that his $36 billion Paulson & Co has emerged as one of the industry’s top performing funds.

AR reports that Paulson’s 2010 earnings even bested the $3.7 billion he made in 2007, when he rocketed to hedge fund fame with his enormously successful wager on the housing market’s collapse.

Other top earning managers were: Bridgewater Associates’ Ray Dalio with $3.1 billion, Renaissance Technologies’ Jim Simons with $2.5 billion, Appaloosa Management’s David Tepper with $2.2 billion and SAC Capital Advisors’ Steve Cohen with $1.3 billion.

Overall, the hedge fund trade publication reports that compensation for the top 25 managers declined by 13 percent from 2009. But 2010 still came in as the third best year for hedge fund pay since AR began estimating industry compensation in 2001.

AR notes that many of the managers on its rich list are “serial earners.” It found that 11 managers, including Simons, Tepper, Cohen and Citadel’s Ken Griffin, have made the rich list at least seven times.

Other rich managers include ESL Investments’ Eddie Lampert, Pershing Square’s William Ackman, Moore Capital Management’s Louis Bacon and Third Point Advisors’ Dan Loeb.