An Indian-origin hedge fund portfolio manager, who was charged in a $276-million insider trading scheme involving Alzheimer’s disease drug trial, appeared in court yesterday and was released on a bail bond of $5 million.

Charges against Mathew Martoma have been brought by Manhattan’s top federal prosecutor India-born Preet Bharara, who has led the government’s massive crackdown on insider trading and won convictions against prominent Wall Street executives like ex-Goldman director Rajat Gupta and billioniare hedge fund founder Raj Rajaratnam.

Martoma was arrested at his home in Boca Raton, Florida last week and appeared in a Manhattan federal court before Judge James Cott, who informed him of his rights as a criminal defendant and freed him on a $5-million bond.

His next court appearance was scheduled for December 26, according to New York Times.

He has been charged with using material, non-public information that he received from a doctor on the clinical trial of an Alzheimer’s disease drug to make profits and avoid losses for his hedge fund in an amount totalling approximately $276 million.

A report in the New York Times cited legal records and said Martoma is the son of Indian immigrants and was born Ajai Mathew Mariamdani Thomas. He changed his name in 2003.

He was raised in Florida and spent a year and a half at Harvard Law School, from where he dropped out to earn a business degree at Stanford University.

Martoma is charged with one count of conspiracy to commit securities fraud and two counts of securities fraud. He faces a maximum penalty of 45 years in prison and a $5-million fine.

As portfolio manager at his hedge fund, Martoma was responsible for investment decisions in public companies in the healthcare sector that were involved in the development of experimental drugs to combat Alzheimer’s disease.

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