Insider trading has been in the headlines this week as SAC Capital Advisors held a conference call with investors revealing that it had received a Wells notice – a notification of possible enforcement action -- from the Securities and Exchange Commission.
This intensified speculation that the government is really aiming higher up in the food chain at Steven Cohen, SAC's multi-billionaire owner/founder, who spoke on the conference call.
A New York Times article said that the government insider trading investigation and intensified and that it had thrust Cohen, a once reclusive money manager, into the public eye to defend his firm and to seek the support of investors.
Martoma reportedly obtained inside information on drug trials from a doctor who worked for an expert network, involving Elan and Wyeth, which helped him to gain profits and avert losses of $276 million.
"Mr. Martoma is a means to an end. The end is to implicate Mr. Cohen," says John Coffee of Columbia Law School.
But one lawyer tells Marketplace that the government doesn't have enough evidence "at this stage" to go further up the chain.
It's important to note that Mr. Cohen has not been charged with any wrongdoing. The firm has continued to strengthen its compliance procedures, according to the New York Times article.
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