WASHINGTON — Federal prosecutors on Tuesday charged a former hedge fund portfolio manager with securities fraud in connection with what they said was the most lucrative insider-trading case ever prosecuted.
In complaints filed in New York, authorities said investment advisors and hedge funds made more than $276 million in illegal profits or avoided losses by trading before the announcement in 2008 of negative results from clinical trials for an Alzheimer’s disease drug being developed by Elan Corp. and Wyeth.
Prosecutors charged Mathew Martoma, a former portfolio manager at CR Intrinsic, an unregistered investment adviser, with securities fraud for allegedly illegally using information about the clinical trial results that he obtained from a neurologist at a hospital involved in the testing.
The criminal complaint did not name the neurologist, which it said was a cooperating witness in the case.
The Securities and Exchange Commission filed a a related civil suit Tuesday against Martoma, CR Intrinsic and Dr. Sidney Gilman, a neurology professor at the University of Michigan Medical School. The SEC suit said Gilman was chairman of the safety monitoring committee overseeing the clinical trials of the Alzheimer’s drug.