NEW YORK (AP) — A doctor testifying at an insider trading trial told a jury on Tuesday that he revealed secrets about the testing of a drug to treat Alzheimer's disease to a large hedge fund's money manager, who paid him $1,500 an hour for consultations.
Dr. Joel Ross testified for the government at the Manhattan federal court trial of Mathew Martoma, an ex-portfolio manager for Stamford, Conn.-based SAC Capital Advisors.
"There was confidential information that I shared with him on more than one occasion," Ross testified.
He said the information was "about the safety and results of certain studies that had not yet reached the public domain."
Martoma is charged with insider trading offenses that the government says earned SAC Capital more than a quarter of a billion dollars. He has pleaded not guilty. The company, founded by billionaire Steven A. Cohen, has pleaded guilty to fraud charges and agreed to pay $1.8 billion. Cohen has not been charged criminally, but regulators have accused him in a civil action of failing to prevent insider trading at the company.
Prosecutors said Martoma, of Boca Raton, Fla., persuaded Ross and another doctor to leak information about the testing of a drug to treat Alzheimer's so he and others at SAC Capital could trade ahead of public announcements.
Ross, testifying as part of a non-prosecution agreement, said that he shared information with Martoma, who paid him for several meetings in 2007 and 2008, in part because he wanted the well-connected Martoma to help him contact biotechnology companies that might be interested in using a drug research center he was opening in Eatontown, N.J.
In one May 2008 email shown to the jury, Ross referenced the biotechnology contacts he desired when he told Martoma he needed "a favor."
Ross added that he "would be happy to return the courtesy in other ways."
Martoma responded to the email by saying that there was "no need to return the courtesy" and that he was "happy to help a friend."
Ross said he had helped Martoma by sharing confidential information about one of his drug trial patients who was suffering from swelling in the brain and by telling him that he was monitoring the test results on about 25 patients among 270 patients participating in the three-year trial.