Dr. Sidney Gilman, the government’s key witness in the insider trading trial of Mathew Martoma, a former portfolio manager at SAC Capital Advisors, testified on Thursday that even though he was a consultant to a constellation of prominent hedge funds and investment firms, the only meetings he recalled with clarity were those with Mr. Martoma.
On his second day of cross-examination, Dr. Gilman testified that he could not recall meetings with analysts and traders working for hedge funds like Citadel, Caxton Associates, Magnetar Capital and Maverick Capital, as well as money managers at J.P. Morgan and Putnam Investments.
“I don’t remember these names, just a few stand out in my memory,†the 81-year-old doctor said in response to questions about other consultations he had done.
In a line of questioning that became tense at times, Mr. Martoma’s lawyer, Richard Strassberg, asked Dr. Gilman about his other consulting work in an attempt to cast doubt on the credibility of his detailed testimony about his dealings with Mr. Martoma. During two and a half days of testimony for the prosecution, Dr. Gilman told the jury that he repeatedly gave Mr. Martoma confidential information over two years, including the results of a clinical drug trial for an experimental Alzheimer’s drug in July 2008. Mr. Martoma is charged with using that inside information to help SAC avoid losses and generate profits totaling $276 million in shares of Elan and Wyeth, which were jointly developing the drug.
Dr. Gilman, a former professor at the University of Michigan, was a member of the safety monitoring committee for Elan during the second phase of its clinical trial. In light of his expertise, Dr. Gilman was also a consultant in high demand with hedge fund clients of the Gerson Lehrman Group, an expert network firm.
Mr. Martoma was introduced to Dr. Gilman in January 2006 by Gerson Lehrman, which arranged consultations for the doctor with more than 300 clients, including SAC. Gerson Lehrman also set up meetings for Dr. Gilman with the hedge funds that Mr. Strassberg questioned him about.
“I had many consultations,†Dr. Gilman said. He testified that he earned more money as a consultant for Gerson Lehrman than he did as a professor.
He acknowledged under questioning from Mr. Strassberg that some of his memory of early meetings with Mr. Martoma was refreshed when he was reviewing his calendar appointments in meetings with prosecutors.
“I never said I recalled that first consultation. I only said it happened because I saw the documents,†he said of his initial phone call with Mr. Martoma.
Dr. Gilman also displayed a spotty memory of an October 2006 meeting arranged by Gerson Lehrman for him to meet a number of hedge fund clients including SAC. It was during this visit that Dr. Gilman testified under questioning by the prosecution that he first met Mr. Martoma in person.
It was not until Mr. Strassberg referred to Dr. Gilman’s appointment with SAC and described how another SAC portfolio manager canceled the meeting with Mr. Martoma that Dr. Gilman said he remembered the last-minute cancellation.
“That actually rings a bell,†he said.
To illustrate how little Dr. Gilman remembered of his other consultations, for which he was paid on average $1,000 an hour by Gerson Lehrman, Mr. Strassberg went into a long questioning of a meeting the doctor had with an analyst from a small hedge fund in June 2008.
For roughly half an hour, Mr. Strassberg repeatedly asked Dr. Gilman about specific details about their conversation concerning the clinical drug trial.
The doctor responded to each question saying he could not recall but did not deny something may have been said.
“I may have, but I don’t recall doing so, sir,†Dr. Gilman responded at one point.
