UPDATED: SAC fund manager alleged to have not 1 but 2 docs feeding him insider info

Former hedge fund trader Mathew Martoma, accused of insider trading in Elan ($ELN) and Wyeth stock, apparently knew how to cover his stock bets. A so-called superseding federal indictment today says the fund manager for a SAC Capital Advisors affiliate had not one but two doctors giving him the inside scoop that allowed his hedge fund to record more than $275 million in profits and losses avoided.

Reuters says the new indictment does not name alleged co-conspirator No. 2, only saying that he or she was involved in clinical trials. The indictment says the doctor served as an expert paid consultant to Martoma and traded information with the expectation that Martoma would help the doctor get more clinical trial business.

Doctor No. 1 has been identified as Sid Gilman, a noted neurologist and Alzheimer's investigator at the University of Michigan who resigned after being fingered as one source of insider information. Gilman was chairman of the safety monitoring committee for a study by Wyeth, which is now part of Pfizer ($PFE). He allegedly told Martoma ahead of the market that the high-profile Alzheimer's drug bapineuzumab came up short in the study. He allegedly was paid $100,000 for helping Martoma reap his $275 million windfall. This all happened back in 2008 when Martoma was a fund manager with CR Intrinsic Investors, although he wasn't indicted until November of last year. He has pleaded not guilty and is scheduled for trial this November.

According to the documents, while the first 9 doctors the trader contacted through an expert networking group all declined an overture to consult for him, "Martoma was ultimately able to arrange--both through the Expert Networking Firm and other channels--paid consultations with multiple doctors with access to confidential information about the drug trial, including Doctor-1 (Gilman) and Doctor-2," FierceBiotech reported.

Since that indictment, federal authorities have rolled out a number of other cases involving insider trading in pharma stocks, including one last month tied to Amgen's ($AMGN) $10 billion offer for Onyx Pharmaceuticals ($ONXX). Authorities asked federal courts to freeze offshore accounts, saying the Securities and Exchange Commission (SEC) found a "highly suspicious" jump in sales of Onyx call options in the three trading days before the buyout offer was made public. The SEC said in its filing that it believes traders bought calls on Onyx shares based on inside knowledge of a potential deal and then, using accounts in the Canary Islands and Beirut, Lebanon, they made a quick $4.8 million. The traders, or their supposed sources, have not been made public.

- here's the Reuters story
- more from FierceBiotech