Former hedge fund manager charged in record insider-trading scheme

Prosecutors say Mathew Martoma helped organize $276 million scam

Yesterday prosecutors arrested a former hedge fund portfolio manager for his involvement in what could be the most lucrative insider-trading scheme in U.S. history.

Mathew Martoma, a 38-year-old former trader at SAC Capital Advisors, is facing charges of one count of conspiracy to commit securities fraud and two counts of securities fraud for purportedly using confidential information about the bad results of clinical trials of a drug that Wyeth and Elan Corp. jointly developed to treat Alzheimer’s disease. According to the charges, Martoma advised his employer to sell shares of drug companies Wyeth and Elan before news about the drug’s prospects came out. Martoma’s scheme helped his company net as much as $276 million in illegal profits.

Ashley Post

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