Back in February, a young man named Mathew Martoma (né Ajai Mathew Thomas) was convicted of securities fraud. In addition to the actual act of using material non-public information about drug companies Elan and Wyeth to help out his employer, SAC Capital, in the P&L department, one thing that did not do wonders for Martoma’s case was the revelation that he had been expelled from Harvard Law School in 1999, as even he will tell you. For everything that Martoma is (a white collar criminal, an accomplished dancer), one thing he isn’t is stupid. That’s why when he was applying to Stanford University’s business school in 2001, he opted not to mention the incident at Harvard, probably figuring it would hurt his chances. One thing Martoma did not have the foresight to anticipate was that he would one day be a convicted felon, and, more importantly, that when it comes down to it? NOBODY MAKES A FOOL OF STANFORD. Which is this just happened:

Mathew Martoma, the SAC Capital Advisors LP employee found guilty last month of insider trading, is no longer a graduate of the Stanford Graduate School of Business, the school confirmed Tuesday. Administrators at the business school rescinded their offer of admission to Mr. Martoma, a move that nullifies the degree he earned in 2003, according to people familiar with the matter.

Of course, the university is not totally heartless: it gave Martoma a chance to explain, but evidently 4 weeks is not enough time to come up with a credible story.

Stanford sent Mr. Martoma a letter last month seeking explanation about statements on his application and allowed him two weeks to respond, according to people familiar with the correspondence. Mr. Martoma’s lawyers requested a two-week extension, which was granted, according to those people. That extension ran out last Friday.

For any b-school graduates who foresee some corporate fraud in their future, take note: even if you are convicted of whatever crime you’re thinking about committing, you’ll still be able to hang onto that degree, assuming you didn’t try and pull a fast one on your alma mater. No one cares that you engaged in securities fraud, or embezzled money from your company, or ran a giant Ponzi scheme, only that you deceived them.

Several elite business schools have had high-flying graduates whose careers imploded in scandal. University of Pennsylvania’s Wharton School counts among its alums former Galleon Group chief Raj Rajaratnam, convicted of securities fraud in 2011, while Harvard Business School educated Enron Corp. CEO Jeffrey Skilling, now serving a prison term for insider trading. Unlike Mr. Martoma, those executives still hold their degrees. “What makes this possible is not that he was a convicted felon, but that he was admitted under false pretenses,” said one Stanford faculty member with knowledge of the situation.

This is about drawing a line in the sand.

Stanford B-School Strips Diploma of SAC Capital’s Martoma [MoneyBeat]

Related: Mathew Martoma Brings Shame To University He Legitimately Graduated From

30 comments (hidden to protect delicate sensibilities)
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Comments (30)

  1. Posted by Quant me maybe ... | March 5, 2014 at 2:16 PM

    Next stop. Divorce court.

    >Boy's gonna not gonna have shit by the time he's done taking the fall for Cohen.

  2. Posted by guest | March 5, 2014 at 2:17 PM

    The pride of Duke!

  3. Posted by Makro Trader | March 5, 2014 at 2:25 PM

    Shitting your pants is what we call the 'curry trade'.

  4. Posted by Nervous J | March 5, 2014 at 2:25 PM

    Oh dear, will he be getting a full refund?

  5. Posted by J. Belfort, BSc. '84 | March 5, 2014 at 2:28 PM

    No worries Matty, I'll get you an honorary one from American

  6. Posted by Guest | March 5, 2014 at 2:43 PM

    And he's still clings on to the Duke batchelor''s

  7. Posted by Guest | March 5, 2014 at 2:48 PM

    The good news is that he'll have time in his jail cell now to sign up and complete a Stanford Executive MBA…

  8. Posted by Guest | March 5, 2014 at 2:50 PM

    The man was busy typing up his appeal. Give him a break. Give him 2 more weeks to respond.

  9. Posted by Guy With Three Names | March 5, 2014 at 2:51 PM

    It's always the high flying ones…

  10. Posted by Ajai | March 5, 2014 at 2:51 PM

    Mom and Dad are going to be disappointed in me now

  11. Posted by investorcluzo | March 5, 2014 at 3:48 PM

    Where he's going, I'm not sure they care where he went to school (or if he even went to school).
    -Professor Emeritus, School of Hard Knocks

  12. Posted by Wire | March 5, 2014 at 3:48 PM

    Née is for a woman. Né is for a man. Unless you're saying that Martoma changed more than just his name.

  13. Posted by Guest | March 5, 2014 at 4:00 PM

    That settles it: CFA.

  14. Posted by Guest | March 5, 2014 at 4:07 PM

    At least not all of that spotlight is falling on me.

    -Belle Knox

  15. Posted by Guest | March 5, 2014 at 4:10 PM

    Four weeks was enough time for the story, but quality supporting documents just took too much time.

    -Matt M

  16. Posted by FabbyFabby | March 5, 2014 at 4:10 PM

    Let's hope University of Chicago doesn't get any ideas.

  17. Posted by Guest | March 5, 2014 at 4:11 PM

    Bet his brother messed up on the emails again

  18. Posted by slippery slope | March 5, 2014 at 4:15 PM

    "…but that he was admitted under false pretenses…"

    ha. like 93% of b-school applications contain stretches of the truth, which normal people would call lies. "spearheaded this…developed that…synthesized…market research…$500mm…$140mm…project manager…synergy…executed…acuity…"

    actual duties: looked pretty and stfu in front of clients, kept my cocaine use on the dl, was blowing my manager

  19. Posted by Steve C | March 5, 2014 at 4:20 PM

    Mathew – don't worry. I won' forget this. You'll be in the Caymans in no time.

  20. Posted by Inside | March 5, 2014 at 4:36 PM

    The disgorgement will be interesting. I am surprised that the judge has the latitude on that.

  21. Posted by Ping Jang | March 5, 2014 at 4:40 PM

    Wouldn't go for it..

  22. Posted by guest | March 5, 2014 at 4:49 PM

    tough but fair

  23. Posted by Turnip Truck | March 5, 2014 at 4:56 PM

    I wonder if Matt will lose his CFA when it's revealed that he was secretly Jim Simons all along.

  24. Posted by Rocco | March 5, 2014 at 5:25 PM


    -Guy who doesn't leave loose ends

  25. Posted by MacCBOE | March 5, 2014 at 11:30 PM

    tough but fair, Steve

  26. Posted by ESP | March 6, 2014 at 4:19 AM

    Does he get his tuition back?

  27. Posted by AAA | March 6, 2014 at 8:48 AM

    Any MBA degree after working five years in the industry is akin to toilet paper

  28. Posted by jj minihan | March 6, 2014 at 3:54 PM

    Maybe Occidental will release their Obama affirmative action transcripts ….. mmmmmmm

  29. Posted by jj minihan | March 6, 2014 at 3:54 PM

    Says the CUNY grad ?????

  30. Posted by GSelevator | March 25, 2014 at 10:29 AM

    He's perfect hedgefund material