Ajai Mathew Thomas
May 18, 1974
|Other names||Mathew Cochukattil Martoma|
|Alma mater||Stanford Graduate School of Business (M.B.A., 2003, revoked 2014), Harvard Law School (Expelled, 1999) Duke University (B.S., Biomedics, Ethics, and Public Policy, 1995) |
|Known for||Insider trading conviction|
|Imprisoned at||FCI Miami (2014-current)|
Mathew Martoma (born May 18, 1974, as Ajai Mathew Mariamdani Thomas) is an American former hedge fund trader. As a portfolio manager at S.A.C. Capital Advisors, he was accused of generating possibly the largest single insider trading transaction profit in history at a value of $276 million. A jury convicted him, and in November 2014 he began serving a nine-year prison sentence. He is currently incarcerated at FCI Miami as inmate 01138-104, and scheduled for early release on 19 July 2021.
Martoma was born in Michigan and grew up in Merritt Island, Florida. His mother, Lizzie, is a doctor and his father, Bobby (formerly Cochukattil Thomas), owns a dry cleaning and laundry company. Both are immigrants from India.
He graduated from Merritt Island High School in 1992. He graduated from Duke University and then attended Harvard Law School but was expelled in 1999 for grade manipulation and dishonesty. He had used computer software to create a fake transcript with better grades which he then sent to federal judges in an attempt to secure a clerkship. After leaving Harvard, he legally changed his name from Ajai Mathew Thomas to Mathew Cochukattil Martoma in 2001.
He then applied and was accepted to Stanford Graduate School of Business, where he received an MBA in 2003. After Martoma's trial, where it was revealed that he had been expelled from Harvard but did not disclose that to Stanford, Stanford took back his degree for being admitted under false pretenses.
Martoma worked as a portfolio manager at S.A.C. Capital Advisors. He was hired in 2006 after working for three years at Sirios Capital Management. Martoma owned a $2 million mansion in Boca Raton. This residence was forfeited as part of Martoma's sentencing.
According to the criminal complaint filed by the U.S. Department of Justice, Martoma allegedly advised Steven A. Cohen to sell shares of pharmaceutical companies Wyeth and Elan Corporation based on tips from two doctors, including Sid Gilman of the University of Michigan, about the Alzheimer's disease drug bapineuzumab during clinical trials overseen by the FDA. Martoma pleaded not guilty to formal charges of securities fraud, two counts, and conspiracy which resulted in $276 million in profits for SAC Capital in 2008. The insider trading trial began on January 9, 2014 in the United States District Court for the Southern District of New York. A jury of seven women and five men were selected to evaluate the evidence in a courtroom presided by U.S. District Judge Paul Gardephe.
On February 6, 2014, Martoma was found guilty on all charges. On September 8, 2014, Martoma was sentenced to 9 years in prison. In addition Martoma must forfeit his $9.38 million bonus which he earned in 2008.
In August 2017, a divided panel of the United States Court of Appeals for the Second Circuit upheld the conviction. In June 2018, the again divided panel issued an amended opinion reaching the same result. On June 3, 2019, the Supreme Court declined to hear Martoma's case, leaving his sentence in place.
- Chip Skowron, hedge fund portfolio manager convicted of insider trading
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- Julia La Roche (December 7, 2012). "Check Out The Florida Mansion Of Accused Insider Trader Matthew Martoma". Business Insider.
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- Kolhatkar, Sheelah (2017). Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Wan on Wall Street (First ed.). New York. ISBN 9780812995800. OCLC 966071597.
- Betzold, Michael (January 26, 2013). "The Corruption of Sid Gilman-How a top U-M doc lost his way". Ann Arbor Observer.
- Van Voris, Bob (November 12, 2012). "Ex-SAC Manager Martoma Charged in Record Insider Scheme". Bloomberg News.
- "Martoma Pleads Not Guilty To Revised Indictment". Finalternatives.com. August 23, 2013.
- Stevenson, Alexandra; Goldstein, Matthew (February 7, 2014). "Ex-SAC Trader Convicted of Securities Fraud". The New York Times. p. A1.
- Goldstein, Matthew (September 8, 2014). "Martoma Sentenced to 9 Years for Insider Trading at SAC". The New York Times.
- Note, Recent Case: Second Circuit Redefines Personal Benefit Requirement for Insider Trading, 132 Harv. L. Rev. 1730 (2019).
- United States v. Martoma, 894 F.3d 64 (2nd Cir. 2018).
- "Supreme Court declines chance to review insider trading prosecutions". TheHill.com. June 3, 2019.