U-M Health System warns faculty, staff in wake of $276M insider trader scheme
In the wake of accusations last week that a University of Michigan neurology professor was involved in an insider trading scheme, The University of Michigan Health System sent an email to faculty and staff Saturday reminding them to follow industry and hospital ethical standards, The Michigan Daily reported.
The email did not mention Sidney Gilman, the professor accused of providing the insider information to an investment portfolio manager, but a health system spokesman confirmed that the email was in reference to Gilman, The Daily reported.
The university said last week that it is carefully reviewing Gilman's alleged involvement in the case.
Gilman is employed as a full professor in U-M’s Department of Neurology, and was formerly chairman of the department from 1977 to 2004. He is the associate director of the Michigan Azheimer’s Disease Research Center at U-M.
Last week, Gilman was accused of providing a Mathew Martoma, a former portfolio manager at CR Intrinsic Investors, with information in advance of its public release about the outcomes of a clinical trial for an Alzheimer’s drug that Gilman was overseeing between 2006 and 2008.
The information reportedly led to a trade of stocks before the clinical trial’s public results release that netted investment advisers and hedge funds about $276 million in illegal profit and saved losses.
U.S. Attorney Preet Bharara said Martoma gained from "cultivating and corrupting" Gilman, eventually receiving $9 million in bonus pay for the year when the trades were made, the Associated Press reported.
Gilman's lawyer, Marc Mukasey, told The Associated Press his client is cooperating with the SEC and the US Attorney's Office, and has entered into a non-prosecution agreement with federal prosecutors.
Gilman is an Alzheimer's expert. He has served on countless advisory boards and is highly decorated. Before coming to the University of Michigan in 1977, Gilman was a neurology professor at Columbia University and at Harvard Medical School.
Additionally, Gilman has been a consultant for numerous pharmaceutical companies, including Merck, Johnson & Johnson, Elan/Wyeth Pharmaceuticals, Pfizer and GlaxoSmithKline. Gilman has been a member of the Gerson Lehrman Group Scientific Advisory Board since 2002.