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Michigan Professor Tied to Insider Trading Case Resigns

Michigan Professor Tied to SAC Insider Trading Case Resigns
Dr. Sid Gilman, a University of Michigan neurologist. Source: University of Michigan

Sid Gilman, the University of Michigan neurologist linked to an insider trading case, has resigned his university position.

Gilman, 80 was named by authorities as the person who leaked data to Mathew Martoma, 38, an SAC Capital Advisors LP hedge fund manager charged with insider trading. Gilman quit his university post on Nov. 27, Pete Barkey, a spokesman for the Ann Arbor-based university’s medical school, said in an e-mail.

Gilman had been paid $1,000 an hour to act as a consultant to Martoma and in 2008 allegedly gave the hedge fund manager details of a clinical trial for an Alzheimer’s drug being developed by Wyeth LLC. The neurologist treated Martoma as a “friend and pupil” while leaking him secret data for 18 months, authorities said.

Martoma has been arrested and charged with insider trading, and is accused of helping the firm make $276 million using the information provided by the university researcher.

Gilman was chairman of a safety-monitoring committee that oversaw a clinical trial by Wyeth, now owned by Pfizer Inc., and Elan Corp. into whether the drug bapineuzumab was safe for patients with mild-to-moderate Alzheimer’s disease. He also moonlighted for a New York-based expert network, providing advice at a fee, according to the Securities and Exchange Commission and the U.S. Justice Department.

The university said in a statement Nov. 21 that it “is carefully reviewing all of Dr. Gilman’s activities while a faculty member.” Barkey said had no further comment about what other steps the university might take.

Gilman’s Agreement

Gilman wasn’t charged by the Justice Department. The non-prosecution agreement between Gilman and the Justice Department, dated Nov. 15, requires him to forfeit $186,781, representing his payments from Elan and an expert-networking post that connected him with Martoma. Gilman was sued by the SEC in its civil complaint.

The doctor earned almost $108,000 for 59 consultations with Martoma, CR Intrinsic and a firm referred to as “Investment Adviser A,” according to the Securities and Exchange Commission. He also served as a consultant to Elan and Wyeth from 2003 until 2009. Elan paid him $79,000 for his work on bapieuzumab in 2007 and 2008, the SEC said.

The doctor passed Martoma confidential clinical trial results showing the Alzheimer’s drug hadn’t worked as well as had been expected, allowing the hedge fund manager to sell his stake in the companies before the negative data became public, according to the SEC and the Federal Bureau of Investigation.

Professional Career

Gilman earned his undergraduate degree in 1954 and medical degree in 1957, both from the University of California, Los Angeles. He was on the faculties at Harvard Medical School and Columbia University before heading to the University of Michigan, according to the school health system’s website .

He was chairman of Michigan’s department of neurology from 1977 to 2004, with research work focusing on neurodegenerative disorders including Parkinson’s disease and Alzheimer’s. He had been director of the Michigan Alzheimer’s Disease Research Center in the university’s medical school, according to the website.

In 2003, the university hospital’s neurology service was named after Gilman, a past president of the American Neurological Association, according to the website.

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