SEC v CR Intrinsic | FT Alphaville

SEC v CR Intrinsic

“This is an insider trading case where affiliated investment advisers and their hedge funds made over $276m in illegal profits…”

Click for the full SEC civil complaint against CR Intrinsic, hedge fund manager Mathew Martoma and neurology professor Dr Sidney Gilman:

Hat-tip to FT hedge fund correspondent Sam Jones.

Meanwhile here’s the DOJ’s sealed criminal complaint in USA v Martoma. From that complaint…

As the FT reports, the FBI arrested Martoma, a former portfolio manager at SAC, on Thursday morning and charged him with insider trading. CR Intrinsic is a unit of SAC.

The SEC alleges Dr Gilman provided Martoma with material nonpublic information about clinical trials of an Elan and Wyeth Alzheimer’s drug in July 2008. Martoma then “caused hedge fund portfolios managed by CR Intrinsic as well as hedge fund portfolios managed by an affiliated investment adviser (“Investment Adviser A”) not only to liquidate their combined long positions in Elan and Wyeth, but also to take substantial short positions,” the regulator further alleges.

Updated – The WSJ earlier named SAC founder Stevie Cohen, who has not been charged under these investigations, as the “Portfolio Manager A” referred to in the SEC’s complaint. On Tuesday evening, SAC released this statement:

Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry.