Securities Fraud Expert Witnesses

What areas of finance may securities fraud expert witnesses consult on?  They may write reports and testify on insider trading, Ponzi schemes, and SEC investigations.  On February 6th former SAC Capital Advisors portfolio manager Mathew Martoma was found guilty of insider trading. Officials said Martoma sold shares in two pharmaceutical companies after getting inside information from Dr. Sidney Gilman.  Dr. Gilman testified he disclosed drug test data to Martoma before the information was made public in 2008.  Martoma then sold the shares and made SAC $276M.

Martoma is one of eight SAC employees to be accused of insider trading and is facing a 20 year sentence.  SEC.gov describes illegal insider trading:

Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include “tipping” such information, securities trading by the person “tipped,” and securities trading by those who misappropriate such information.

Examples of insider trading cases that have been brought by the SEC are cases against:

  • Corporate officers, directors, and employees who traded the corporation’s securities after learning of significant, confidential corporate developments;
  • Friends, business associates, family members, and other “tippees” of such officers, directors, and employees, who traded the securities after receiving such information;
  • Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;
  • Government employees who learned of such information because of their employment by the government; and
  • Other persons who misappropriated, and took advantage of, confidential information from their employers.

 

 

 

About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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