Martoma Harvard Law Fake Once-a-Decade Event: DershowitZ

Photographer: Peter Foley/Bloomberg

Mathew Martoma, a former portfolio manager with SAC Capital Advisors LP, arrives at federal court in New York, on Jan. 7, 2014. Close

Mathew Martoma, a former portfolio manager with SAC Capital Advisors LP, arrives at... Read More

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Photographer: Peter Foley/Bloomberg

Mathew Martoma, a former portfolio manager with SAC Capital Advisors LP, arrives at federal court in New York, on Jan. 7, 2014.

Mathew Martoma’s faked Harvard Law School transcript, which led to the former SAC Capital Advisors LP fund manager’s expulsion, is a type of transgression seen only about once every 10 years, said law professor Alan Dershowitz.

“I remember probably about one a decade,” said Dershowitz, a lawyer on the faculty since 1964 who has represented defendants including O.J. Simpson and Claus von Bulow. “The more usual case is we’ll find someone who faked their college resume” to get into the school.

Martoma was expelled from Harvard Law School in 1999 after officials discovered he had changed grades on his transcript in an application for a clerkship, according to documents made public in the federal insider-trading trial against him. On the fake transcript that was sent to 23 federal appeals court judges, three grades were raised to A from B or B+, according to the documents.

At the trial in Manhattan yesterday, Assistant U.S. Attorney Arlo Devlin-Brown told jurors Martoma “corrupted” a doctor overseeing a clinical trial of a drug for Alzheimer’s disease in order to gain nonpublic information and trade shares of Elan Corp. and Wyeth. SAC gained $276 million from trades based on the illegal tips in 2008, said prosecutors, who have called it the most-lucrative insider-trading scheme in history.

Richard Strassberg, an attorney for Martoma, told jurors yesterday that his client is “an innocent man. Mathew Martoma did not commit these charges.”

‘Grossly Prejudicial’

Martoma’s lawyers argued that revealing the information about the expulsion was “grossly prejudicial” and intended to “paint Mr. Martoma as a liar in the eyes of the jury.”

According to records of the law school disciplinary proceeding, Martoma, 39, told a panel that he created the phony transcript only to make his parents think his grades were better than they actually were. He said he arranged for his younger brother to assemble and mail the clerkship applications to the judges. The brother mistook the doctored transcript for a real one and sent it out to the judges, Martoma claimed.

Some members of the law school administrative board that reviewed Martoma’s case believed he had changed the date on his computer to create a backdated e-mail saying he was no longer seeking a clerkship, to the secretary of Morton J. Horwitz, an emeritus professor of American legal history who had agreed to send recommendation letters for Martoma.

The panel recommended Martoma be dismissed from the school and he appealed.

Harsh Punishment

The appeal was heard by Harvard Law professor Randall L. Kennedy. Charles Ogletree Jr., founder of Harvard’s Charles Hamilton Houston Institute for Race and Justice, argued that dismissal was too harsh a punishment.

Robb London, a spokesman for the law school in Cambridge, Massachusetts, didn’t immediately respond to a call seeking comment on Martoma’s expulsion.

Lou Colasuonno, a spokesman for Martoma, didn’t immediately return phone calls seeking a response to Dershowitz’s comments.

Dershowitz has represented numerous famous clients. He played a role in former pro football player Simpson’s successful defense against murder charges in 1995, helped represent financier R. Allen Stanford, who was convicted of fraud-related crimes in 2012, and assisted in the appeal by socialite von Bulow, overturning his conviction for attempting to murder his wife, Sunny.

Faculty Vote

Harvard Law School’s disciplinary code calls for the entire faculty to vote on cases in which expulsion is considered, Dershowitz said yesterday in a phone interview. He said he recalls a handful of cases such as Martoma’s. He declined to discuss details of the expulsion because the disciplinary proceedings are confidential.

When the school is considering an expulsion, the general procedure is that faculty members will receive a memo from the disciplinary committee with a recommendation, and the faculty will discuss, debate and vote on an action.

Dershowitz said he’s received a dozen calls from former students and colleagues asking whether he knew Martoma. He said he doesn’t recall Martoma as a student.

The more crucial issue is whether SAC Capital founder Steven Cohen knew of Martoma’s academic history when he hired him, Dershowitz said.

“I get phone calls all the time from law firms and hedge funds asking me about students,” he said. “If I were asked about a student and knew he had been expelled I would not give that student a recommendation and one way or the other, that fact would become known.”

In a $1.8 billion settlement of the government investigation, SAC agreed in November to plead guilty to securities fraud and close its investment advisory business. The revelations about Martoma’s past may make it more difficult for the prosecutors to use his testimony against Cohen, who hasn’t been charged, Dershowitz said.

“Even if he flips, Cohen’s lawyers have an ace up their sleeve,” he said. “Who’s going to believe a guy like that?”

The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: John Lauerman in Boston at jlauerman@bloomberg.net; Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Lisa Wolfson at lwolfson@bloomberg.net

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