Cutthroat Cohen Looks at Demise for Being Soft Supervisor

In April 2008, three months before drug makers Elan Corp. and Wyeth were scheduled to release results of their Alzheimer’s drug trial, two health-care analysts for hedge-fund manager Steven A. Cohen warned their boss in an e-mail that a doctor, who implied he had seen inside information about the trial, said it wasn’t going well.

Cohen, who had bought shares of both companies on the advice of Mathew Martoma, one of his health-care portfolio managers, shot back with a question: How would any doctor know interim results? The analysts, who were bearish on Elan and Wyeth, replied that the doctor said he had seen the data before agreeing to be part of the trial. The information, the analysts said, was better than Martoma’s, according to an order filed last week by U.S. regulators against Cohen for what they said was failure to supervise his employees.