Posted Nov 21, 2012 02:42 pm CST
A former hedge fund manager has been accused of trading on insider information about an Alzheimer’s drug that led to $83 million in profits and $194 million in avoided losses.
Manhattan U.S. Attorney Preet Bharara alleges in a press release that defendant Mathew Martoma and his hedge fund benefited in “what might be the most lucrative inside tip of all time.” The Wall Street Journal Law Blog, the Wall Street Journal (sub. req.), the Los Angeles Times and the New York Times DealBook blog have stories.
Martoma, who worked at SAC Capital Advisors, is accused of selling stock in Elan Corp. and Wyeth Pharmaceuticals after getting a secret look at disappointing data from a drug trial for bapineuzumab. He was charged with one count of conspiracy to commit securities fraud and two counts of securities fraud.
The Los Angeles Times says the case has raised “a swirl of questions” about Martoma’s boss, Steven Cohen, who founded SAC Capital. He has not been charged.
Martoma’s lawyer, Charles Stillman, said his client “succeeded through hard work and the dogged pursuit of information in the public domain,” according to DealBook. Stillman said he was confident that Martoma would be exonerated.