U.S. prosecutors on Thursday filed a superseding indictment in the insider trading case against a former portfolio manager at an affiliate of Steven A. Cohen's hedge fund SAC Capital Advisors, according to court papers. The superseding indictment describes a second doctor who allegedly passed inside information to the former portfolio manager, Mathew Martoma, who was charged last November with insider trading in shares of the drug companies Elan Thursday's court filing said the doctor, described as "a co-conspirator," met with Martoma for paid consultations arranged through an expert networking firm and provided non-public information "with the expectation that Martoma would assist (the doctor) in obtaining additional clinical trial business." [Reuters, related]
Preet Bharara: University Of Michigan Doctor Financially Compensated For Leaking Confidential Drug Trial Data To Former SAC Trader Just An Innocent Pawn In Big Bad Hedge Fund's Game
As you may have heard, earlier today, Mathew Martoma, a former portfolio manager in SAC Capital's CR Intrinsic unit, was charged with allegedly running “the most lucrative insider trading scheme ever," netting $276 million for the fund. He did so based on information that was given to him by Sid Gilman, a University of Michigan neurologist and chair of a "safety-monitoring committee that oversaw a clinical trial by Wyeth LLC and Elan Corp. into whether the drug bapineuzumab, or bapi, was safe for patients with mild-to-moderate Alzheimer’s disease." Over an 18-month period, Gilman and Martoma met 42 times, in addition to emailing and chatting over the phone. For example: