It was recently uncovered that former SAC portfolio manager Mathew Martoma, who is currently fighting insider trading charges in a New York courtroom, was kicked out of Harvard Law School for forging his transcript and then forging documents to try to convince the school that he hadn’t forged his transcript.
However, Martoma was still able to get into Stanford’s Graduate School of Business a couple years later and graduate with his MBA.
It’s startling to hear that someone who was found to have gone to exceptional lengths to commit fraud at Harvard would quickly be admitted to Stanford.
So the next questions are:
Did Stanford know that Martoma booted out of Harvard for forging his transcript?
If Stanford didn’t know, will the university now rescind Martoma’s MBA after discovering that he concealed highly material information when applying to the school?
The full backstory:
In September 1999, Martoma, who was then going by the name Ajai Mathew Mariamdani Thomas, was expelled by a Harvard Law faculty committee for changing his B’s to A’s on his transcript. Even after the committee voted to expel him, he tried to appeal by creating a fictitious computer forensic company to persuade Harvard that he didn’t forge the transcripts, court documents show.
In 2001, Martoma was admitted into Stanford’s Graduate School of Business, one of the best MBA programs in the country. He graduated from there in 2003.
Citing federal laws, Stanford would not comment on Martoma’s situation in particular. They were able to give us statements regarding their admissions policies in general.
In general, MBA programs, including Stanford, ask applicants if they have ever been disciplined or dismissed from a school. If he were being honest, Martoma would obviously have had to disclose to Stanford that he was expelled from Harvard Law, and then explain why. The fraud he was kicked out for, Stanford says, would make it very difficult for him to be admitted.
“Our application includes questions asking applicants about attendance, academic status, and disciplinary actions at other institutions. Expulsion from another institution due to fraud, if it were disclosed or known, would create a serious impediment to admission,” a spokeswoman for Stanford GBS told Business Insider in an emailed statement.
The spokeswoman continued, “We ask applicants if they have ever been suspended or dismissed from any college, university, or post-secondary institution or been the subject of disciplinary action by such an institution. We also ask if they have been placed on academic probation. If they answer yes to any of these questions, we ask for a full explanation. We also require transcripts from all post-secondary institutions attended.”
The Stanford spokesperson also explained what often happens when it is revealed that an applicant lied in his or her application (rescinding of admission offers or expulsion), but she did not comment on what happens if the fraud is uncovered years after graduation.
“There’s no blanket policy, but we regard misstatements or material omission as very serious matters and application fraud can lead to dismissal. We would treat a misstatement about, for example, leaving a job in May vs. June differently from a fraudulent transcript. In a typical year, we revoke 1-3 offers of admission.”
Another question is if Martoma did lie, why didn’t Stanford catch it? That remains unclear. But one factor may have been his sudden name change.
After leaving Harvard, Martoma changed his name from Ajai Thomas to Mathew Cochukattil Martoma, according to Bloomberg News.
Although you have a legal right to call yourself whatever name you chose, it would be illegal to perpetrate a “fraud” by assuming another name so you could avoid your past and be admitted to a school.
However, if Martoma didn’t lie to Stanford and somehow convinced them that he had learned from his behaviour at Harvard Law, then Stanford should not have any recourse in rescinding his MBA.
Meanwhile, a verdict for Martoma could come out any day now in Manhattan federal court. The jury is currently in deliberations deciding his fate.
Prosecutors said Martoma used negative confidential drug trial info to trade in the stocks of pharmaceutical companies, Elan Corporation and Wyeth, between the summer 2006 and mid-July 2008. The SAC fund was then able to exit those positions and short those stocks avoiding losses of $US276 million, prosecutors said.