An undated handout photo of Dr. Sidney Gilman, a top Alzheimer's researcher. Gilman's conversion to a Wall Street consultant was not readily apparent in his lifestyle and was a well-kept secret at work.
Handout, Nyt - Nyt
Professor had 'double life' with traders
- Article by: NATHANIEL POPPER and BILL VLASIC
- New York Times
- December 15, 2012 - 5:08 PM
Speaking in front of a packed convention hall in Chicago, a top Alzheimer's researcher, Sidney Gilman, presented the results of a drug trial that had the potential to change the fate of elderly patients.
But as he worked through the slides, it became clear to the audience on that day in July 2008 that the drug was not delivering and that its makers, Elan and Wyeth, could lose out on blockbuster profits. Along with other Wall Street analysts in the front rows, David Moskowitz zapped messages to clients to dump shares of the companies. "I can remember gasping" at the results, he said.
Little did anyone in the room know that 12 days earlier, Gilman had e-mailed a draft of the presentation to a trader at an affiliate of one of the nation's most prominent hedge funds, according to prosecutors. That allowed the fund, SAC Capital, and its affiliate to sell more than $700 million of Elan and Wyeth stock before Gilman's public talk. Last month, the trader was arrested on insider trading charges after Gilman agreed to cooperate with prosecutors to avoid charges.
While he appeared a grandfatherly academic, Gilman, 80, was living a parallel life, one in which he regularly advised a network of Wall Street traders through a professional matchmaking system. Those relationships afforded him payments of $100,000 or more a year -- on top of his $258,000 pay from the University of Michigan -- and travels with limousines, luxury hotels and private jets.
Colleagues now say Gilman's story is a reminder of the corrupting influence of money. The University of Michigan, where he was a professor for decades, has erased any trace of him on its websites and is reviewing its consulting policy, a spokesman said.
"What is the argument for sanctioning your full-time faculty, using your brand name, to advise the financial sector?" said Dr. Garret FitzGerald, a cardiovascular researcher at the University of Pennsylvania, who has been outspoken about conflicts of interest. "What's the public good there?"
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