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Advisors in the Spotlight: Ex-SAC Capital’s Martoma on Trial for $276M Insider Trading Scam, Financial Industry Recruiters Say LinkedIn Hurts Their Business, & A Fugitive Bank Director Wanted for Securities Fraud is Arrested

Former SAC Capital Portfolio Manager Mathew Martoma On Trial for Securities Fraud
Mathew Martoma, the ex-SAC Capital Advisors portfolio manager accused in the insider trading scam that involved $276 million in Wyeth and Elan stocks, is now on trial. Martoma allegedly used tips from a doctor involved in Alzheimer drug trials. The government says that due to the information SAC liquidated a $700 million position and sold its stocks in the firms, which allowed it to make money while avoiding losses.

In court this week, one doctor testified that he was surprised that Martoma knew so much about the results of a clinic trial before they were publicly disclosed. Already, prosecutors have filed charges against 83 people and four SAC entities over what the US is calling the largest illegal trade in our nation’s history. There have been several convictions.

Last year, SAC pleaded guilty to securities fraud over the insider trading charges and agreed to shut down its investment advisory as part of its $1.8 billion settlement.

Financial Industry Recruiters Blame LinkedIn For Their Lost Business
According to industry recruiters, their own jobs are suffering because of LinkedIn. Whereas companies typically had to use recruiters to fill their job openings, they now can post them on LinkedIn and look for candidates.

One reason for this is that many financial firms have gotten more involved in social media ever since 2011 when the Financial Industry Regulatory Authority provided them with guidance. Now, the majority of independent brokerage firms let their advisers used LinkedIn.

Fugitive Ex-Bank Director and Investment Fund Manager is Arrested and Charged with Securities Fraud, Wire Fraud
Aubrey Lee Price, a former bank director and investment fund manager who became a fugitive after he was indicted on securities fraud and wire fraud charges, was arrested in Georgia. Price is accused of managing funds and raising about $40 million from over 100 investors and then covering up his losses when the investments failed.

In a suicide note that he supposedly sent out before he disappeared, Price confessed to misappropriating the money and publishing bogus account documents. He was recently arrested during a routine traffic stop.

Price is accused of losing the capital of Montgomery Bank & Trust when he worked for that institution as a director by allegedly investing in riskier options and securities than what he represented he would get involved in and then covering up the losses.

Investment Adviser Fraud
Our securities fraud lawyers represent investors with claims involving broker fraud, investment advisor fraud, municipal advisor fraud, CDO fraud, ARS fraud, REIT fraud, MBS fraud, RMBS fraud, Ponzi scams, muni bond fraud, and other securities schemes. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

Latest SAC trial begins with Martoma facing long odds, CNNMoney, January 10, 2013

LinkedIn disrupts the recruitment game, search consultants say, Investment News/Crain’s Detroit, December 19, 2013

Aubrey Lee Price, fugitive banker, homeless before arrest, CSMonitor, January 3, 2014

More Blog Posts:
Advice to Advisors: Financial Advisors Taught Ways to Avoid SEC Scrutiny, Stockbroker Fraud Blog, November 11, 2013

Why did UBS Financial Advisors Recommend Puerto Rico Muni Bonds to Elderly and Retired Investors?, Stockbroker Fraud Blog, November 6, 2013
Puerto Rican Labor Groups Want the US Territory to Sue UBS over the Bond Debacle, Institutional Investor Securities Blog, October 28, 2013

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