The government's star witness against former SAC Capital Advisors trader Mathew Martoma yesterday confirmed what has long been suspected: SAC founder Steven Cohen was the ultimate target of federal investigators.
Sidney Gilman, who has admitted to passing confidential information about drug trials to Martoma, said the Federal Bureau of Investigation was rather upfront when its agents first questioned him in 2011.
"I am only a grain of sand, as is Mr. Martoma," Gilman said the FBI agents told him. "They said they are really after a man named Steven A. Cohen."
Gilman faced a second day of cross-examination yesterday, and revealed the FBI's intentions in response to a question from Martoma's lawyer about why he had lied to the agency at that time and for nearly a year after.
On the stand, Gilman initially said the FBI asked him only about Martoma. "Can I get back to the question, because I didn't quite answer it fully," Gilman asked, before mentioning Cohen.
Martoma's lawyers are attempting to show that Gilman, a former medical professor at the University of Michigan, has a faulty memory and is saying whatever it takes to please federal prosecutors, who have pledged not to charge him.
Richard Strassberg, Martoma's chief lawyer, suggested that Gilman had begun cooperating only after he realized how much time in prison he faced. Gilman denied the allegation. And he hammered away at why Gilman remembered only his meetings and discussions with Martoma in detail, in spite of the fact that he had consulted with some 300 clients over a three-year period, including hedge funds Citadel Investment Group, Caxton Associates, Magnetar Capital and Maverick Capital.
Gilman admitted that he remember his early meetings with Martoma only after reviewing his appointments with prosecutors.
"I never said I recalled that first consultation," Gilman told the jury. "I only said it happened because I saw the documents."
Strassberg cited notes taken by Tokum Capital Management's Rene Shen in 2008 during a phone consultation with Gilman. The doctor admitted that the notes contained information that was not in a press-release issued on the day of the call.
Gilman also acknowledged that he "may well have" discussed confidential information about the drug trial with other hedge funds, but that he did not "recall doing so." He said that the difference between Martoma and the other hedge funds he consulted with was that Martoma "wanted me to regurgitate" the information discussed at meetings of the drug trial's safety committee, which Gilman led.