By Emily Flitter
NEW YORK, Aug 22 (Reuters) - U.S. prosecutors on Thursday restated their case against a former portfolio manager who worked for Steven A. Cohen's hedge fund SAC Capital Advisors, adding a new twist to what is considered to be the centerpiece of the multi-pronged legal action against SAC, court papers showed.
Prosecutors filed a revised indictment in the insider trading case against Mathew Martoma the former SAC employee. In it, they restated their basic case against Martoma while adding new details, including information about a second doctor who allegedly gave him inside information.
They also portrayed Martoma's interactions with doctors introduced to him by expert networking firms as a methodical hunt for sources of inside information.
Martoma's lawyer Richard Strassberg did not immediately respond to a request for comment.
Martoma was charged last November with insider trading in shares of the drug companies Elan and Wyeth, which is now a part of Pfizer. The two companies were working together on a trial for a new drug to treat Alzheimer's Disease.
Prosecutors initially alleged one doctor, identified in a corresponding case brought by the U.S. Securities and Exchange Commission as the neurologist Sidney Gilman, formed a close relationship with Martoma and shared with him non-public information he obtained while supervising part of the trial.
Gilman is cooperating with prosecutors and agreed to pay a $186,781 disgorgement.
The new charging document expands the characterization of Martoma's actions, claiming he not only received and used Gilman's information but also actively sought other insider sources and found at least one more.
Thursday's court filing said the second doctor, described as "a co-conspirator," met with Martoma for paid consultations arranged through an expert networking firm and provided non-public information "with the expectation that Martoma would assist (the doctor) in obtaining additional clinical trial business."
The filing did not name the second doctor or the expert networking firm through which Martoma met him. The firm that connected Martoma and Gilman was Gerson Lehrman Group.
The filing described GLG as an "expert networking firm," while it described the firm that introduced Martoma to the second doctor as "a financial services firm that provided expert networking services to the SAC hedge fund."
GLG spokesman Loren Riegelhaupt declined to comment.
Other details in the new charging document expand on Martoma's alleged attempts to find inside information.
According to the new charging document, Martoma emailed an expert networking firm a list of 20 doctors who were serving as investigators in the Alzheimer's drug trial and asked for consultations with them. An employee of the expert network firm replied that of the nine doctors who responded to the firm's query, all had declined to speak with Martoma, citing a "conflict of interest."
The charges also describe a trip Martoma took to see Gilman in his Ann Arbor, Michigan office at the University of Michigan, where Gilman was a professor. Martoma flew to meet Gilman on a Saturday in July 2008, days before a scheduled public announcement about the drug trial.
On Sunday, Martoma called SAC Capital's founder, who appears as "SAC Owner" in the new charging document but has previously been identified as Steven A. Cohen by sources familiar with the case. On Monday, SAC sold "virtually all of its approximately $700 million worth of Elan and Wyeth stock prior to the public announcement," the charges said.
The case is U.S. v. Martoma, U.S. District Court, Southern District of New York, No. 12-cr-00973.