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Mathew Martoma Bailey McCann, Opalesque New York:
Today the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) brought charges in what the enforcement agencies are calling the most lucrative insider trading scandal ever. The SEC brought civil charges against Mathew Martoma of Stamford, Connecticut-based hedge fund advisory firm CR Intrinsic Investors. CR Intrinsic Investors is part of the federation of hedge fund managers affiliated with Steven Cohen's SAC Capital. Cohen, while not directly named in the SEC complaint was referenced as 'Portfolio Manager A’ and is as yet, only implicated in the matter not directly charged with criminal wrongdoing as Martoma is. FBI agents arrested Mr. Martoma today in Florida.
According to the complaint, Martoma hired a doctor, Sidney Gilman, through what is commonly known as an expert network. These networks typically amount to subject matter experts that advise hedge fund managers or other investors on potential investment opportunities. Working with expert networks in this way is legal under US law.
Where things go bad for Mr. Martoma is how far he took this relationship. In the charges, the SEC says he became a 'friend and pupil,’ of the doctor and through that relationship extracted material and non-public information about an Alzheimer’s drug trial. This information was then used as part of a tradin...................... To view our full article Click here
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