India link in fresh US insider trading scam

Mathew

A PROMINENT Indian-origin hedge fund portfolio manager has been charged with participating in one of the "most lucrative" insider trading schemes ever in the US.

Mathew Martoma, 38, has been charged with using material, non-public information that he received from a doctor on the clinical trial of an Alzheimer's drug to make profits and avoid losses for his hedge fund for an amount totalling approximately $276 million.

Martoma, who was arrested last week from his home in Boca Raton, Florida, was released on Monday on a $5 million bail after a brief hearing at the Manhattan federal court here. He did not enter any plea and the judge set the next hearing for December 26.

The US Securities and Exchange Commission has also filed a civil insider trading case against him.

A Stanford University graduate, Martoma is the son of Indian immigrants and was born Ajai Mathew Mariamdani Thomas. He changed his name in 2003.

Manhattan's top federal prosecutor Preet Bharara brought the charges against Martoma, who had worked with CR Intrinsic Investors, an affiliate of SAC Capital Advisers. SAC is owned by Steven Cohen, one of the richest men in the world.

Martoma is charged with one count of conspiracy to commit securities fraud and two counts of securities fraud. He faces up to 45 years in prison and $5 million fine. While free on bail, his movements will be restricted within the US.

Last month, another Indian-American, Rajat Gupta, was jailed for two years in the largest insider trading case in US history.

PTI

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