Mathew Martoma, a former student at Harvard Law School and a SAC Capital Advisors portfolio manager, was sentenced to nine years in prison and required to forfeit $9.4 million in earnings for his role in “the most lucrative insider trading scheme ever charged,” according to Manhattan District Attorney Preet Bharara '91.
Legal proceedings last winter uncovered that Martoma was expelled from the Law School after forging his transcript in the hopes of receiving one of the coveted federal court clerkships. Following his expulsion, Martoma changed his name and gained entrance to Stanford’s Graduate School of Business, yet his degree was revoked by Stanford following the revelations of the case earlier this year.
Martoma and colleagues received insider information from two doctors on an Alzheimer’s disease drug produced by pharmaceutical companies Elan and Wyeth, and used the information to amass $275 million in profits and avoided losses, according to the federal complaint.
SAC Capital Advisors, a hedge fund started by Steven A. Cohen, was also required to pay $1.2 billion for securities fraud to the Securities and Exchange Commission and prohibited from handling outsiders’ money. Cohen, whose net worth is estimated by Forbes to be about $9 billion, has renamed SAC Capital to Point72 Asset Management and retooled the hedge fund to handle only his personal wealth.
Administrators and faculty from the Law School declined to comment on the case, as they have done throughout the legal proceedings.
—Staff writer Tyler S. Olkowski can be reached at tyler.olkowski@thecrimson.com. Follow him on Twitter @OlkowskiTyler.
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