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U.S. charges ex-SAC manager in $276 million insider scheme

Nov 21 2012 Emily Flitter, Reuters

U.S. prosecutors on Tuesday charged a former SAC Capital employee with insider trading in a series of transactions that hedge fund titan Steven A. Cohen had personally signed off on. In what they called "the most lucrative" insider-trading scheme ever, prosecutors alleged that Mathew Martoma helped Cohen's firm avoid losses and reap profits totaling $276 million in the summer of 2008 by using insider tips he got from a doctor about Elan Corp and Wyeth LLC. Martoma is the fifth person associated with SAC Capital, one of the most widely followed and influential hedge funds, to be charged with insider trading in either a criminal or civil proceeding. He had worked for a unit of SAC Capital called CR Intrinsic Investors in Stamford, Connecticut, until 2010. The criminal complaint against Martoma does not name Cohen but refers to him as the "owner" of the hedge fund and makes clear that Cohen and Martoma talked often about the fund's trading in shares of Elan and Wyeth. The

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