Prosecutors add details to case against SAC manager

Aug. 23, 2013 at 4:44 PM
share with facebook
share with twitter

NEW YORK, Aug. 23 (UPI) -- Federal prosecutors have added fresh details to their indictment of former SAC Capital Advisors portfolio manager Mathew Martoma, court papers show.

The New York Times reported Friday prosecutors now claim Martoma worked with two doctors to obtain illegal insider information concerning drug trials.

The information helped SAC earn profits or avoid losses totaling $276 million, the Times said.

In exchange for testimony against Martoma, the government will not charge one of the doctors, Sidney Gilman at the University of Michigan, with any crimes, the Times reported.

The identity of Dr. Gilman, a neurologist, already had been made public.

But prosecutors now say Martoma met with a second doctor, devising an arrangement in which Martoma would receive insider information and the doctor would receive help finding clinical trials for work.

The second doctor has also not been charged. He was named a "co-conspirator" in the court filing.

Prosecutors say Martoma's relationship with Gilman, which began in 2006, was first arranged by the Gerson Lehrman Group, which helps money managers link up with industry experts.

Gilman was allegedly paid $108,000 in consulting fees in return for 42 consulting sessions with Martoma.

Gilman, in the process, allegedly broke his contract with the Gerson Lehrman Group that forbids divulging corporate secrets.

Martoma's insider trading trial is scheduled to begin Nov. 18.

His lawyer, Richard Strassberg, declined to comment on the new filings, the Times said.

He is not the only SAC trader to be implicated in the insider trading case. Five other SAC employees have pleaded guilty to various insider trading charges. The firm's founder and owner Steven Cohen has been charged by the Securities and Exchange Commission with neglecting his duties as a supervisor in a financial firm.

The Justice Department has also charged the firm itself, SAC Capital Advisors, with insider trading, which can only be done if a series of employees participate in insider trading.

Related UPI Stories
Trending Stories