A portfolio manager employed by one of the biggest hedge fund tycoons on Wall Street has been charged with insider trading by the U.S. Department of Justice.

Mathew Martoma, who worked at CR Intrinsic, a unit of SAC Capital Advisors, was accused of making more than $276 million through the use of secret information from a a neurology professor at the University of Michigan, Dr. Sidney Gilman, who was involved in discouraging clinical trials for an Alzheimer’s drug being developed by Elan and Wyeth pharmaceutical companies.

Preet Bharara, the U.S. attorney in Manhattan who brought the charges, called the case “the most lucrative insider trading scheme ever charged.”

Not named as a defendant, but mentioned in the court filings, is billionaire Steven A. Cohen, who founded SAC. Martoma worked closely with Cohen in buying and selling large blocks of Elan and Wyeth shares, according to a civil case that also has been filed by the Securities and Exchange Commission.

SAC manages about $13 billion and possesses about $39 billion in total buying power, according to The New York Times’ DealBook.

-Noel Brinkerhoff

To Learn More:

Insider Inquiry Inching Closer to a Billionaire (by Peter Lattman, New York Times)

A Quick Guide to the Latest Insider-Trading Case (by Joe Palazzolo, Wall Street Journal)

United States v. Mathew Martoma (U.S. District Court, Southern New York) (pdf)