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Mathew Martoma, who was behind one of the biggest insider trading scandals of all time with a profit of $276 million, was quietly released from jail two weeks ago

Introduction

Martoma is born to Indian immigrant parents in Florida. Goes to Duke then gets into Harvard Law School. Gets kicked out of Harvard Law School for changing his grades, him *and his family* change their names and with his new name he finesses his way into Stanford Business School a year later.

Martoma starts working for Steven A. Cohen at the infamous SAC Capital, and this is where he makes magic happen for a very short while, before getting caught. As an aside, it's weird to me that no news outlets have reported on his release since the prosecution of SAC Capital was so big at the time.

Mild connection to GameStop frenzy

The connection is not a big stretch IMO, basically the way my line of thinking works here is Mathew Martoma kept Steven A. Cohen (infamous for insider trading) out of jail by not throwing him under the bus. Cohen then mentors Gabe Plotkin and Gabe starts Melvin Capital. So, if Cohen was in jail then Melvin Capital would never have opened up shop, let alone be massively short GME.

And that's about it, some more details below.


A bit more detail:

Mathew Martoma was released from prison on July 19th on good behavior, according to his wiki page [wiki link]. I wasn't able to confirm it with any other news sources, but I did do an inmate search on him three weeks ago on bop.gov (I've been following this dude's story for a while) and he came up then — he doesn't come up anymore.

More detail about the GME connection

GME had a high short interest which was a significant part of DFV's thesis [link].

One of the biggest shorts (and losers) in this saga by dollar amount was Melvin Capital (who have lost just over $5 billion YTD) and was later given $2.75BN just to keep running by Citadel and Steven A. Cohen [link].

Melvin Capital is run by Gabe Plotkin who was Steven A. Cohen's protégé. Anecdotally, Plotkin actually overrode his analysts and himself made the decision to sell GME calls. [link]

TLDR: No Cohen → No Plotkin → No Melvin → No massive GME short

Martoma's involvement with SAC Capital

Mathew Martoma made the insider trades using information about an Alzheimer's drug from two doctors [link] including, a then professor at the University of Michigan, Sid Gilman.

Prosecutors find and grill Martoma to get Cohen, but Martoma doesn't give him up [link]. Since they couldn't get Cohen, and there were no willing witnesses they went after the company itself and a few of the employees instead. If Martoma had given up Cohen then Cohen would be in prison and Melvin Capital would've never opened up shop.

Highlights from Martoma's life story

Mathew Martoma also has a little bit of an insane personal story (just lifting this off of wikipedia [link] and Bloomberg [link]):

  1. Born in Florida in 1974 to Indian immigrants as Ajai Mathew Mariamdani Thomas (note the different name)
  2. Graduates from a public high school in Florida and goes to Duke for (this is a good one) Biomedics, Ethics, and Public Policy
  3. Goes to Harvard Law School
  4. Is applying to a clerkship for a federal appeals (ironic) court judge and changes a couple Bs to As cuz fuck it why not
  5. Gets caught, tells the registrar at school it was all "just a joke" (direct quote)
  6. Gets kicked out of Harvard Law School, but appeals
  7. Appeal fails, Martoma gets kicked out of Harvard
  8. Spends a year volunteering
  9. Changes his name to Mathew Martoma, and from 1994 to 2001 his parents and both of his siblings also change their last name to Martoma. With his new name, he applies to and is accepted to Stanford Business School (what a fucking finesse holy shit).
  10. Does the insider trading deed, gets a ~$9 million bonus in January 2009, fired for losing money in 2009 and 2010 and moves back to Florida
  11. Gets prosecuted and goes to jail sometime in the fall of 2014, also loses his Stanford MBA for having been admitted under false pretenses
  12. Released on good behavior on July 19, 2021

submitted by /u/bigdickbabu
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