insider-trading

Yesterday we learned that Mathew Martoma, on trial for orchestrating “the largest insider trading scheme in history,” got himself expelled from Harvard Law School 15 years ago for creating fake transcripts to boost his grades. Obviously, this is not a great thing to have come to light if you are about to ask a jury to believe you are an innocent man, particularly if the judge presiding over your case is going to allow the story to be included by the prosecution.

But apparently changing his Civil Procedure grade from B to A (Contracts from B+ to A; Criminal Law B to A) was but a warm up for the deluge of lies the artist formerly known as Ajai Mathew Thomas would go on to tell! The subsequent ones, courtesy of the findings of Harvard’s administrative board, included:

  • Claiming the fake transcript was only meant to be seen by his parents

Mr. Thomas asserts that he did not purposefully send the judges the altered transcript. He contends that they received it by accident. According to Mr. Thomas, he altered his transcript only for the purpose of deceiving his parents.

  • Blaming the mix up on his brother

At the end of December of in early January, Mr. Thomas’s application for a clerkship was sent to 23 judges in the United States Court of Appeals. The applications included the altered transcript. . . . Mr. Thomas has stated that it was his intention that the real transcript be sent with his applications. According to his statement, he arranged with his brother for the latter to prepare the packets of materials for mailing to each judge; his brother came across the altered transcript and, mistakenly believing that it was the real transcript, included it with the application.

  • Potentially the best lie among the lot, the one in which he said that after he was asked to interview with the judges who received the altered grades, he tried his hardest to come off as a candidate they wouldn’t want to hire…

On January 26 and 27, Mr. Thomas interviewed for a clerkship with Judge Sentelle, Judge Randolph, and Judge Ginsburg of the United States Court of Appeals for the D.C. Circuit. Mr. Thomas did not disclose to the judges that the transcript that they had received was not accurate…Mr. Thomas has stated that it was his intention, in order to avoid any harmful effect from the altered transcript, not to be offered a clerkship and that he tried not to be a successful candidate at the interviews.

  • …but damn it, they saw through his act!

Read more »

After a full day of questioning dozens of potential candidates in a federal courtroom in Lower Manhattan on Wednesday, lawyers still had not selected the 12-member jury for the insider trading trial of Mathew Martoma, a former hedge fund manager at SAC Capital Advisors…One of the eight potential jurors excused before lunch was a lawyer who said she had concerns about her ability to be impartial. Another was a man who said he questioned the value of insider trading laws on economic grounds. By the afternoon, potential jurors were excused for more mundane reasons, like being unable to take three and a half weeks off from work for the trial. The group of remaining candidates included the chief executive of a footwear and accessory company who wore four-inch boots, a film professor at New York University who spent much of the day chewing on an unlit cigar and an employee at the accounting firm PricewaterhouseCoopers. [Dealbook]

Before Mathew Martoma was (allegedly!) telling Steve Cohen to dump large positions in Elan and Wyeth based on inside information he received from a doctor involved in clinical trials of an Alzheimer’s drug, he was making fake transcripts of his grades at Harvard Law School. Read more »

Mathew Martoma, the latest employee of Steven A. Cohen’s SAC Capital Advisors to face trial on insider trading charges, lost a bid on Friday to delay his trial, which is scheduled to start on January 6. Martoma’s lawyer, Roberto Braceras, told U.S. District Judge Paul Gardephe in New York that the conviction of SAC portfolio manager Michael Steinberg on Wednesday had ignited a new round of media stories that often mentioned Martoma, raising the possibility jurors could be tainted by the coverage. He asked for a two-week delay, adding that they needed the extra time to prepare for trial in light of several pending motions. But Gardephe said he had already postponed the trial from the autumn to January “extremely reluctantly,” adding that the intense media attention on SAC would likely continue. “The fact of the matter is, there is a piece of news about SAC nearly every day,” he said. [Reuters]

As of Monday morning, SAC trader Michael Steinberg was innocent against charges of insider trading in the eyes of a juror named Demethress Gordon. But on Monday evening, Gordon “attended a screenwriting class that happened to focus on the subtext of characters’ actions.” And then this happened: Read more »

  • 18 Dec 2013 at 5:57 PM

SAC’s Steinberg Is Going To Prison

This probably does not come as any more of a surprise to him than it does to anybody else, given (a) that prosecutors are batting 1.000 on insider-trading cases these days, and (b) that he passed out as soon as he saw the jury walk into the courtroom. Read more »

Michael Steinberg was furious after receiving an email in October 2010 from a research consultant he had hired, according to the lawyer for the SAC Capital Advisors LP portfolio manager. In the email, the consultant told his clients that the Federal Bureau of Investigation had contacted him about insider trading. Mr. Steinberg called the consultant and made him cry, according to the lawyer, Barry Berke. Mr. Steinberg was irate about the possibility that the consultant, John Kinnucan, had been feeding him illegal inside tips, Mr. Berke said. “[Mr. Steinberg said] ‘is this inside information you’re giving me?’” Mr. Berke told U.S. District Judge Richard Sullivan on Monday. “And [Mr. Kinnucan] is like ‘no, no, I swear, Mike, it’s not.’”…The content of Mr. Steinberg’s conversation with Mr. Kinnucan came out in another conversation that was recorded at the behest of the FBI. In that one, former SAC analyst Jon Horvath told ex-Level Global Investors LP analyst Spyridon “Sam” Adondakis that his boss, Mr. Steinberg, had ripped into Mr. Kinnucan after receiving the email. Unknown to Mr Horvath at the time, Mr. Adondakis was cooperating with the FBI, according to prosecutors. [WSJ]