Why did a doctor turn to insider trading?


What makes a respected 80-year old doctor in charge of important clinical trials turn to a life of illegal insider trading?

The knee-jerk answer would be money--and lots of it. But in the case of Dr. Sidney Gilman, the government's key witness in its case against Mathew Martoma, formerly of SAC Capital, that can't be the whole answer.

An interesting New York Times profile notes that, "His conversion to Wall Street consultant was not readily apparent in his lifestyle in Michigan and was a well-kept secret from colleagues. Public records show no second home, and no indication of financial distress."

He apparently enjoyed the lifestyle of a luminary and was a strong teacher. His ability to pontificate to a rapt audience of important financial folks might have played a role. Perhaps he craved the respect he got, the feeling of importance. For whatever combination of reasons, he ended up a tool of hedge fund managers via the Gerson Lehrman expert network.

It may be tempting to see him as a victim, but he knew exactly what he was doing. He requested that Martoma use false topics to requests meetings, to avoid arousing suspicion. All in all, Gilman ruined his life for what in hindsight seems like a modest amount of money. There are others ways to corrupt a soul, however.

Gilman's career in medicine has basically ended, but he's now in the trading business. In return for escaping charges, he will now have to prove his worth to the government as a witness against Martoma, whom he perhaps once considered friend.

For more:
- here's the article

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