The prosecution's star witness against former SAC Capital Advisors trader Mathew Martoma admitted he lied to investigators for more than a year before agreeing to cooperate with the government in the insider-trading case.
Sidney Gilman's testimony was cut short by yesterday's snowstorm in New York—he'll be back on the stand today to face cross-examination—but under questioning by prosecutors, he said he lied to the Federal Bureau of Investigation when first approached in September 2011.
"I was so intensely ashamed," Gilman, a former University of Michigan medical professor, told the jury. "I was hoping the whole thing would go away."
The "whole thing," Gilman said, was the confidential information about an Alzheimer's drug trial that he passed to Martoma, allowing Martoma to allegedly earn or save SAC $276 million. Gilman said he warned Martoma that the trial was not going well in July 2008, nearly two weeks before he was set to present the findings to other Alzheimer's specialists and just a day after he learned himself.
Gilman led the trial's safety committee. He has been given immunity from prosecution.
The following summer, Gilman said he came clean, telling "the government that I had provided inside information to Mr. Martoma repeatedly."
Gilman, like Joel Ross, another doctor who admitted he passed information about the trials to Martoma, said the hedge-fund manager was particularly interested in one side-effect, a type of brain swelling that could have been a sign that the drug was working.
The 81-year-old told the jury that he kept Martoma up to date in "minute detail," frequently speaking to him within a couple of days of the safety committee's meetings. "He frequently asked me to pause or to go more slowly was I was telling him numbers," Gilman said.
Gilman also gave confidential information to a former SAC healthcare analyst, David Munno, at Martoma's request. Munno has not been charged with wrongdoing and could be called as a witness.