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Stock Manager Busted in Historic Insider Trading Scheme

In 2008, an up-and-coming portfolio manager for the hedge fund company SAC Capital helped earn $275 million in profits and avoided losses related to trades involving pharmaceutical companies and an experimental Alzheimer’s drug. He even took home a $9 million bonus in the process. If that sounds too good to be true—especially during a rocky year for the stock market—that’s because it was.

Stock Manager Busted in Historic Insider Trading Scheme

Insider Trading GraphicFor Mathew Martoma, 2008 seemed like a banner year. As an up-and-coming portfolio manager for the hedge fund company SAC Capital, he helped earn $275 million in profits and avoided losses related to trades involving pharmaceutical companies and an experimental Alzheimer’s drug. He even took home a $9 million bonus in the process.

If that sounds too good to be true—especially during a rocky year for the stock market—that’s because it was. Martoma’s success was based not on his investment savvy but on illegally obtained inside information. Earlier this month, he was convicted of securities fraud in a Manhattan federal court in what U.S. Attorney Preet Bharara called “the most lucrative insider trader scheme ever charged.”

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Feb 28, 2014 04:00 PM