| NEW YORK
NEW YORK Jan 15 A doctor who is a key witness
in the insider trading trial of Mathew Martoma said Wednesday
that the former SAC Capital Advisors trader appeared to know the
results of a drug trial even before some researchers involved in
Joel Ross, a New Jersey doctor involved in the clinical
trial for an Alzheimer's drug, told jurors in federal court in
New York that he met with Martoma in July 2008 just after he and
other doctors involved in the study were told the results of the
But during the meeting in the lobby of a Chicago hotel,
Ross said Martoma knew, almost exactly, various statistics that
Ross had just learned at a presentation for researchers and
which would not be made public until the next day.
"It was like he was in the room with me with the slides I
had just seen," Ross said.
Martoma is one of eight current or former employees at
Steven A. Cohen's SAC Capital hedge fund to face charges over
Prosecutors say Martoma, a portfolio manager at SAC's CR
Intrinsic Investors, used inside information to build up a $700
million position in Elan Corp Plc and Wyeth and then
pushed the hedge fund to sell it off in 2008, before the trial
results came out. Wyeth is now a unit of Pfizer Inc.
Thanks to those trades, SAC made profits and avoided losses
of $276 million, the indictment said.
Ross' account gives extra weight to the prosecutors'
contention that Martoma already knew the results of the clinical
trial thanks to another doctor, Sidney Gilman, who prosecutors
say began sharing the results 11 days earlier.
Later, under questioning by Martoma's defense team, Ross
conceded that Martoma, 39, did not tell him that he had already
seen slides from the presentation.
"He never told you ahead of time that he already had access
to the slides, did he?" Roberto Braceras, a lawyer for Martoma,
"No," Ross said.
SAC Capital, which once managed $14 billion, has agreed to
pay $1.8 billion in criminal and civil settlements and plead
guilty to fraud charges stemming from insider trading by its
employees. Cohen has not been criminally charged and has denied
Ross, 58, acted as a clinical investigator on the Phase II
drug trial, overseeing about 25 patients through his Memory
Enhancement Center of America Inc clinic out of roughly 240
Much of the government's questioning Wednesday focused on
the events of July 28, 2008, a day before the results of the
clinical trial would be announced publicly at an Alzheimer's
disease conference in Chicago.
Ross and other doctors acting as principal investigators in
the study of the drug, bapineuzumab, were scheduled to receive
those same results a day earlier at the same conference, which
was held in a downtown Chicago hotel.
Before the doctors learned the results, Martoma and Ross
made plans to discuss them right afterwards, Ross said.
The presentation the doctors received, which was shown at
trial, was filled with complicated graphs, statistics and
medical jargon. But Ross gave jurors a bottom-line summary: "The
drug did not work."
After the presentation, Ross said, he met Martoma in the
Ross said that when he told Martoma he was still hopeful
about the drug, the SAC trader questioned how he could be so
optimistic, citing various data that the doctor said he had only
just seen at the presentation.
"I was, if not flabbergasted, then very surprised he knew
that," Ross said.
Prosecutors have alleged that Martoma already knew the
results after receiving them from Gilman, a former professor at
the University of Michigan who chaired the drug's safety
According to the prosecution, Gilman, 81, told the results
to Martoma over the phone on July 17, 2008. Martoma went to meet
with Gilman at his office in Ann Arbor, Michigan, two days
later, on a Saturday, where he reviewed a presentation about the
Both Ross and Gilman are cooperating with the government
pursuant to non-prosecution agreements. Gilman is expected to
testify later in the trial.
During testimony Wednesday, Ross acknowledged that at the
end of the trial, he will "get to go home," as Braceras, the
lawyer for Martoma, put it during questioning.
"I hope to resume the practice of care for my Alzheimer's
patients," he said.
The case is U.S. v. Martoma, U.S. District Court, Southern
District of New York, 12-cr-00973.