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UMHS e-mails faculty, staff about insider trading scheme

By Giacomo Bologna, Daily Staff Reporter
Published November 25, 2012

Leaders of the University of Michigan Health System sent an e-mail to UMHS staff and faculty on Saturday to address Neurology Prof. Sidney Gilman’s alleged involvement in a $276-million insider trading scheme.

The e-mail — sent jointly by Ora Pescovitz, the executive vice president for medical affairs, Douglas Strong, CEO of the University of Michigan Hospitals and Health Centers and Medical School Dean James Woolliscroft — did not specifically mention or condemn Gilman. Instead, it stressed the importance of following the customs established by the hospital accreditation organization the Joint Commission, the American Medical Association and the National Institutes of Health, in addition to their “our own values of what is right.”

However, UMHS spokesman Pete Barkey confirmed Sunday that the faculty member referred to in the e-mail is Gilman.

“This is an opportune time for all of us in the Health System to reaffirm our commitment to follow the highest standards of integrity in the conduct of research and in the delivery of patient care,” the e-mail stated.

The message also warned staff against releasing any non-public information unlawfully.

“In our teaching, patient care and research roles, we are entrusted with confidential information of many types, and we work hard to never betray that trust,” the e-mail stated. “We are proud of our rich legacy and disappointed when we fail.”

Gilman served as the chair of the Department of Neurology from 1977 to 2004. In 2003, the neurology service at University Hospital was named “The Gilman Service” after the renowned neurology professor and an annual Sid Gilman and Carol Barbour Lecture in Neuroscience was also established that same year.

Barkey declined to comment on why the e-mail was sent to staff, noting that it was an internal message.

Barkey said in a statement Wednesday that Gilman has remains a Neurology professor at the University, but his involvement in the scheme is being “carefully reviewed.” He said he had no further information on Sunday.

Gilman was allegedly paid $100,000 for non-public information he gave to Matthew Martoma, a portfolio manager at CR Intrinsic, a unit of the SAC Advisors hedge fund. Officials at the U.S. Securities and Exchanges Commission have deemed it the largest insider trading scheme ever caught by federal authorities.

Gilman signed a non-prosecution agreement with prosecutors and has agreed to cede $234,000 toward settling the case. His lawyer, Marc Mukasey, acknowledged that he will be cooperating with prosecutors and the SEC.

Follow Giacomo on Twitter at @giacomobologna.