Friday, March 07, 2014 at 12am

Stanford GSB Strips Convicted Insider Trader of MBA: MBA News

Stanford GSB Strips Convicted Insider Trader of MBA: MBA News main image

Former S.A.C. Capital Advisors trader Mathew Martoma has had his MBA revoked by the Stanford Graduate School of Business (Stanford GSB) after it came to light that he had previously been expelled from Harvard Law School for faking his grades. This comes a month after a highly-publicized conviction for insider trading.

The Stanford GSB admissions process requires any previous academic disciplinary action to be reported. Martoma neglected to mention that he had been expelled from Harvard in 1999 when enrolling at Stanford GSB in 2001. The revelation of such an expulsion would have been a “serious impediment” to his being admitted into the school, a Stanford source revealed to The New York Times.

Loss of MBA follows insider trading conviction for S.A.C. Capital Advisors trader Mathew Martoma

Mathew Martoma was convicted of insider trading in early February, having helped to earn S.A.C. Capital Advisors US$250 million through deals based on secret knowledge of trials of a new Alzheimer’s drug, sponsored by drug makers Elan and Wyeth.

The then Stanford GSB graduate learned the secrets from Sidney Gilman, formerly a professor of neurology at the University of Michigan, who he paid US$1 million over several years for consultations, The Telegraph reports. After finding out the results of clinical trials, S.A.C. Capital Advisors sold their shares in the drug makers, and built a short position from which the company made a huge profit after the public announcement of the test results.

Mathew Martoma will be sentenced in June. He faces up to a decade behind bars for his participation in the biggest insider trading scheme in the history of the US, with S.A.C. Capital Advisors pleading guilty in November for encouraging such tactics for over a decade. The firm has agreed to pay US$1.8 billion to settle the charges.

Image: Spencer Platt/Getty Images

 

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