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    Accused Of Insider Trading, Mathew Martoma Pleads Not Guilty


    by IBTimes


    Former SAC Capital employee Mathew Martoma has pleaded not guilty to insider trading charges on Thursday (January 3) at his arraignment at a federal courthouse in New York.

    He is accused of using inside information to generate profits and avoid losses totaling $276 million (USD) in shares of two drug stocks Elan Corp PLC and Wyeth.

    The criminal complaint filed by federal prosecutors and a related civil lawsuit filed by the SEC contend Martoma got insider information from a doctor who is not named in the criminal complaint because he is now cooperating with prosecutors after agreeing to pay a $186,781 disgorgement.

    The SEC complaint identifies the doctor as Sidney Gilman, who leaked secret information from an Alzheimer's disease drug trial.

    Gilman is an 80-year old neurology professor at the University of Michigan.

    The charges against Martoma stem from the U.S. government's long-running investigation of improper trading in the $2 trillion hedge fund industry, which the Federal Bureau of Investigation has called Operation Perfect Hedge.

    The 38-year-old Martoma is scheduled to reappear in court on March 5.