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Mathew Martoma, center, arrives for jury selection for his trial at federal court Jan. 7 in New York. Martoma is charged with persuading a University of Michigan medical professor to leak secret data from an Alzheimer's disease trial between 2006 and 2008, while Martoma worked at SAC Capital Advisors, the hedge fund company founded by billionaire Steven A. Cohen. Prosecutors say the information enabled other investment professionals at SAC to earn a quarter-billion dollars illegally.

(AP photo)

A former top Alzheimer's researcher told a Manhattan jury Friday that he had to quit teaching at the University of Michigan, because he shared secrets about a drug trial with a hedge fund trader who won him over with some sandwiches and perceptive questions about science and medicine.



Dr. Sydney Gilman

Sidney Gilman, 81, of Ann Arbor, testified at the trial of former SAC Capital Advisors portfolio manager Mathew Martoma that some secrets about the clinical drug trial for a promising Alzheimer's drug "slipped" out during a meeting with Martoma in 2006 or 2007.

Asked by a prosecutor if Gilman had actually slipped when he shared information for the first time with Martoma, Gilman said: "At first I did, but later on I gave it to him intentionally."

Gilman is the star witness for the government in its prosecution of Martoma on insider trading charges. The government said Martoma, who has pleaded not guilty, learned secrets that enabled the company founded by billionaire Steven A. Cohen to earn more than a quarter of a billion dollars. The Stamford, Conn.-based company has pleaded guilty to fraud charges and agreed to pay $1.8 billion.

Gilman said he taught for seven years at Harvard University and nine years at Columbia University before taking the University of Michigan job in 1977. He said he had planned to teach for another five years at Michigan but retired in November 2012 "rather than getting fired" as details about his dealings with Martoma became known.

Asked to identify Martoma in the courtroom, Gilman first looked around the courtroom without success but spotted him quickly once the doctor put on his glasses.

Gilman said he has admitted civil claims outlined in a lawsuit brought by the Securities and Exchange Commission and paid restitution of $186,000 plus interest.

Gilman said he met Martoma as part of a paid consulting business he had with people in the financial field. Besides his $210,000 annual teaching salary, he said he earned about $150,000 in 2007 and nearly $200,000 in 2008 through consultation meetings where he charged $1,000 for the first hour and lesser fees for additional time.

He described being impressed by Martoma when he met him at the stock trader's Manhattan office, where an array of sandwiches was waiting.

"I remember that he had lunch prepared which was most unusual in those visits to clients," Gilman said. "What a pleasant individual he was, very friendly, very nice, very cordial. ... I thought he was a very bright individual."

Gilman said Martoma seemed to know about every clinical trial Gilman mentioned and asked perceptive questions.

As the relationship developed through subsequent phone calls and meetings, Gilman said Martoma told him he wanted them to be friends.

"Initially, I resisted that overture," said Gilman.

He said Martoma wanted to meet him at national conferences and "I did succumb to that request," agreeing to a meeting over a cup of coffee at which he recalled Martoma talking about his family and having children in rapid succession.

The doctor said he forgot he was supposed to once meet Martoma in Istanbul, Turkey, and found it "very touching that he tried so hard to find me and was worried about me," eventually locating Gilman in a hotel lobby.