Jury selection begins Tuesday in the trial of Mathew Martoma, a former SAC Capital Advisors portfolio manager who is charged with using confidential information in what U.S. prosecutors called the most lucrative insider trading scheme ever. Martoma is accused of trading on confidential tips, obtained from two doctors, about drug companies Elan Corp. and Wyeth, now owned by Pfizer. The doctors warned Martoma about a failed clinical trial, which allegedly enabled him to make profits, or avoid losses, totaling $276 million.
Martoma is the latest former SAC investment professional to go to trial as part of the government’s widening crackdown on insider trading, which has resulted in 78 people either pleading guilty or being convicted at trial. Last month former SAC portfolio manager Michael Steinberg was found guilty on all five counts he was charged with in his insider trading case. It was the government’s first trial conviction for an SAC employee. He was found guilty on four counts of securities fraud and one count of conspiracy stemming from trades in Dell Inc and Nvidia Corp.
In a page out of the activist investor playbook, The Men’s Wearhouse has launched a hostile takeover offer for rival Jos. A. Bank Clothiers, Inc. for $57.50 per share, raising its prior offer of $55 per share. The tender offer expires on March 28. Men’s Wearhouse also announced it plans to nominate two director candidates for election to Jos. A. Bank’s Board of Directors at its 2014 annual meeting. The offer received support from at least one interested party: Ricky Sandler, chief executive officer of Eminence Capital, the $4.9 billion hedge fund firm that owns 9.8 percent of the common stock of The Men’s Wearhouse and is the company’s largest shareholder. In a statement, the New York-based hedge fund manager said: “We are encouraged by the increased bid MW made for JOSB and by its commitment to consummate a combination as demonstrated by its tender offer and nomination of a director slate. We continue to believe that a merger of these two companies is in the best interests of all shareholders.” This is that Pac Man-like fight that began when Jos. A. Bank made a hostile offer for Men’s Wearhouse.
Steven Tananbaum, managing partner and chief investment officer at New York-based hedge fund firm GoldenTree Asset Management, publicly predicted that shares of American Shipping — formerly Aker American Shipping — have the potential to double over the next 24 months. He also said Overseas Shipholding Group should buy American Shipping, which charters commercial boats, when OSG exits bankruptcy. The pronouncement was made on the new-ish social media website Harvest, which encourages financial professionals to engage in discussions and serve up ideas.