One of the affiliates, CR Intrinsic Investors, was accused of engaging in an insider-trading scheme involving a new Alzheimer’s drug being developed by pharmaceutical companies Elan Corporation and Wyeth.
According to the SEC’s complaint, one of CR Intrinsic’s portfolio managers, Mathew Martoma, obtained confidential information about the drug from a doctor through a New York-based "expert network" company, which connects investors with industry experts. The doctor, Sidney Gilman, told Martoma that the drug had done poorly in clinical tests two weeks before those tests became public, according to the SEC. Martoma and CR Intrinsic then had funds they controlled sell more than $960 million in Elan and Wyeth securities in about a week.
