University Of Michigan Professor In $276M Insider Trade Case Retires
ANN ARBOR (WWJ/AP) - A senior University of Michigan medical school faculty member linked to a $276 million insider trading case has retired.
The university said last week that it was investigating the role of Dr. Sidney Gilman and officials on Tuesday confirmed that the 80-year-old professor retired.
Federal investigators say Gilman was involved with ex-hedge fund manager Mathew Martoma, who's accused of getting secret, advance results of tests on an experimental Alzheimer's drug that netted more than $276 million for his fund and others.
Gilman was a neurology professor and chaired a safety committee overseeing trials of the drug. Prosecutors say Martoma met with Gilman about 42 times, beginning in the summer of 2006, and eventually convinced him to start talking about the drug trial.
"By cultivating and corrupting a doctor with access to secret drug data, Mathew Martoma and his hedge fund benefited from what might be the most lucrative inside tip of all time," U.S. Attorney Preet Bharara said.
Martoma was arrested Nov. 20 on allegations that he used the information to advise other investment professionals to buy shares in the companies developing the drug, then later to dump those investments and place financial bets against the companies when the tests returned disappointing results.
According to the Securities and Exchange Commission, the massive repositioning allowed various hedge funds to reap huge illicit profits and avoid steep losses.
Gilman's lawyer Marc Mukasey has said his client is cooperating with investigators and has a non-prosecution agreement with prosecutors. A copy of the agreement released by federal prosecutors last week showed that Gilman will forfeit nearly $187,000 that he received for consulting work between 2006 and 2009.
The university said in a statement that it takes the situation "very seriously" and is "carefully reviewing all of Dr. Gilman's activities" at the Ann Arbor school.
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