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As the years advanced, however, the seeds of scandal were sown. Key personnel at SAC, including Matthew Martoma, became embroiled in high-stakes trades that were soon subjected to the scrutiny of federal authorities.
The Downfall: Insider Trading Scandal
The crux of the scandal arose from Martoma's dubious acquisition of insider information regarding Alzheimer's drug trials. His rapport with Dr. Sydney Gilman, a key figure behind the trials, gave SAC Capital an unwarranted advantage, leading to a profitable but illicit sell-off amidst anticipated poor results.