Bloomberg reports that Mathew Martoma, a former health-care portfolio manager at a unit of Cohen’s $14bn SAC Capital Advisors LP, was charged yesterday with using inside information from a clinical trial of an Alzheimer drug to help the firm reap as much as $276m in profits and averted losses on shares of Elan Corp and Wyeth. Cohen bought the pharmaceutical stocks on recommendations from Martoma and sold them after Martoma was told of disappointing results from the companies’ tests, prosecutors said.
'This is a significant step forward for the government in their tracing of evidence that seems to be leading to SAC', Thomas Gorman, a partner in Dorsey & Whitney’s litigation and enforcement practice group based in Washington, said in an interview. It also 'raises the question of compliance procedures and how well they are policed at SAC'.
Martoma’s lawyer, Charles Stillman, said he is confident his client will be exonerated. Neither Cohen, 56, nor SAC Capital have been charged with any wrongdoing.
'Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry', Jonathan Gasthalter, a spokesman for SAC Capital, said in an e-mailed statement.
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