insider-trading

There’s also Martoma’s relationship with Stephen Chan, who was facing charges that he defrauded financial firms of $12.6 million when they met that year. Chan pleaded guilty to mail fraud and conspiracy and was sentenced to more than four years in prison. FBI agents who approached Martoma at his Florida home in 2011 used Chan’s name as a pretext to talk with him. When they said they really wanted to talk about Martoma’s trades, he fainted. Though that was a ruse, their association, which lasted only a few months, may complicate Martoma’s ability to contest charges that could land him in prison for 20 years. If Martoma takes the stand during the defense case, which may begin today, prosecutors can use his history with Chan as ammunition to attack his credibility…According to Chan, he and Martoma worked out together, practiced martial arts and took dance lessons at the Arthur Murray Dance Studio in Natick, Massachusetts. They had dinner together five or six times a week, Chan said…Lou Colasuonno, a spokesman for Martoma, said the fund manager’s association with Chan and the Harvard matter “was a decade and a half ago and has no bearing on the present case.” While not calling Martoma as a witness limits the government’s ability to impugn his credibility, it also restricts the defense’s power to counter the charges. “It cuts off any avenue by which Martoma can explain himself,” Sabino said. [Bloomberg]

81-Year-Old Neurologist Proposes Theory Of Memory Evolution

Sidney Gilman—Alzheimer’s specialist, former University of Michigan medical professor and confessed provider of confidential information to the hedge-fund set—used his final moments on the witness stand to offer one more contribution to science. Read more »

Not sure why it would come as much of a surprise that a person who almost successfully conned his way into a prestigious clerkship and then entirely successfully got himself admitted to Stanford Business School despite an expulsion from Harvard would have a complete understanding of basic securities laws, but here you go: Read more »

  • 13 Jan 2014 at 12:00 PM

Exclusive Preview: Harvard Law School Class Notes

1999: ARLO DEVLIN-BROWN Law ’99 writes that you never know where you’ll run into a classmate. He is prosecuting MATHEW MARTOMA (nee Thomas) ’99* on insider trading charges in Lower Manhattan. Devlin-Brown has asked U.S. District Judge Paul Gardephe (unfortunately Penn ’79, Columbia ’82) for permission to talk about Matt’s expulsion from Harvard for doctoring his transcript, so get ready for fireworks! The trial is expected to last several weeks, so for anyone who missed WILLIAM PULLMAN and Lisa Frank’s (Yale ’03, NYU Law ’08, NYU Stern ’08) Christmas Eve nuptials, it would be a great opportunity for a mini-reunion!” Read more »

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 »