For the first time ever, Stanford University’s Graduate School of Business today (March 5) confirmed that a 2003 graduate of the most selective MBA program in the U.S. no longer has a degree because he was admitted under “false pretenses.”
The decision to nullify Mathew Martoma’s MBA, first disclosed earlier today by The Wall Street Journal, follows his conviction last month of insider trading charges. “Martoma does not have a Stanford MBA,” confirmed Stanford GSB spokesperson Barbara Buell.
The school ostensibly did not strip the former hedge fund trader at SAC Capital Advisors of the degree because of his Feb. 6th conviction, but rather because he failed to disclose that he was thrown out of Harvard Law School for doctoring his grade transcript and sending the forged document to federal judges in search of a job.
MARTOMA APPARENTLY FAILED TO TELL STANFORD HE WAS KICKED OUT OF HARVARD
Two years after being dismissed from Harvard, Martoma had changed his name and successfully applied to Stanford’s business school. But he apparently covered up the fact that he had been kicked out of Harvard. The decision by Stanford indicates that Marie Mookini, then director of MBA admissions at Stanford, did not know that the applicant was expelled. Mookini, now an MBA admissions consultant based in Palo Alto, declined comment.
“What makes this possible is not that he was a convicted felon, but that he was admitted under false pretenses,” a faculty member told the Journal.
Stanford sent Martoma a letter in February seeking an explanation about statements he made on his original MBA application and gave him a two-week deadline for a response, according to the newspaper. Martoma’s lawyers asked for a two-week extension which was granted by Stanford. When the new deadline ran out on Friday without a response, Stanford decided to pull Martoma’s degree.
STANFORD HAS REMAINED MUM ON THE MARTOMA INCIDENT
Though Stanford has consistently declined direct comment on the Martoma case, citing privacy laws, the school does make clear that applicants who are admitted to its MBA program on false pretenses can have their degrees revoked. Most observers assume that Martoma, who legally changed his name from Ajai Mathew Thomas to Mathew Martoma when he applied to Stanford, failed to admit that he was thrown out of Harvard Law School for a disciplinary reason.
“Federal law (FERPA) prohibits Stanford from discussing the specific academic status of a former student,” says spokesperson Buell. “However, we take very seriously any violation of the integrity of our admissions process. When there is evidence that any misrepresentation has been made, Stanford’s policy and practice is to review the matter carefully. Determining the validity of the evidence is undertaken immediately, but can take time. When a review is completed, Stanford’s policy provides it can revoke an offer of acceptance and a degree, if it was found that an individual gained admission through false pretenses. “
All of this has come to light many years later because of Martoma’s New York trial on charges of insider trading. Though his ouster from Harvard was ruled inadmissible by the judge, the disclosure of the unsealed disciplinary report showed that he used computer software to improve some of his first-year law school grades from B’s to A’s. He then sent the forged transcript to nearly two dozen judges when he applied for federal clerkships.
What is all the more intriguing is the extent to which Martoma went to conceal his fraud—all of it revealed in excruciating detail in the court papers which includes the full report by a Harvard Administrative Board that recommended his expulsion from the school. A close reading of the board’s report provides a seldom seen glimpse into a disciplinary procedure at a top law school, but also how the board bent over backwards to be fair to someone who was so unethical.
CHANGING ‘B’ GRADES TO ‘A’ GRADES IN THREE COURSES TO SHOW TO HIS PARENTS ON CHRISTMAS EVE
Martoma, who graduated with a degree in biomedicine, ethics and public policy from Duke University in 1995, had entered Harvard Law School in 1997 and quickly racked up what the law school board would call “an excellent record” in his first year-and-a-half. Besides his solid grades, he was on the Board of Student Advisers, an editor of the Journal of Law and Technology and a semi-finalist in the school’s annual moot court competition. He co-founded the Society of Law and Ethics.
For whatever reason, however, the academic record Thomas had compiled just didn’t seem good enough—for him. At the half-way mark of his JD education, in December of 1998, Thomas altered the transcript of his first-year grades so that he received an A rather than a B in Civil Procedure, an A rather than a B+ in Contracts, and another A in Criminal Law instead of a B. He didn’t change his B+ grade in Torts, nor his A- in Negotiation.
The day before Christmas, Thomas showed the forged transcript to his mother, Lizzie Thomas, a doctor, and his father, Bobby Martoma, who owns residential and commercial properties in Florida. They were ecstatic. Several days later, according to a statement made to the Harvard board, Thomas “realized that what he had done was wrong and showed his parents his real grades.”