How A Crook Got Into Stanford B-School

Mathew Martoma apparently lied his way into Stanford’s MBA program

How did Mathew Martoma, who was expelled from Harvard Law School in 1999 for forging his transcript, get into the most selective business school in the U.S. two years later?

That is a question admission officials and consultants are asking about Martoma, 39, who is currently on trial for federal insider trading charges in New York.

The Class of 2003 Stanford MBA worked at SAC Capital Advisors, the hedge fund run by billionaire Steven A. Cohen.  He is accused of using illegal tips on drug trials to create the most lucrative trade ever based on inside information. Martoma is the eighth SAC executive to face insider-trading charges. The prior seven have been convicted.

Spokesperson Barbara Buell confirmed to The New York Times that Martoma – who would later go on to work at SAC Capital Advisors, the hedge fund run by the billionaire Steven A. Cohen – enrolled at the university in 2001 and graduated with an MBA in 2003. He joined SAC Capital as a health care stock portfolio manager three years after getting his MBA degree.

CHANGED FIRST YEAR GRADES AT HARVARD LAW FROM Bs TO As

Martoma’s expulsion from Harvard for creating a false transcript was disclosed in court papers unsealed on Thursday (Jan. 9), a day before opening arguments began in what is expected to be a four-week trial. The documents reveal that Martoma changed some of his first-year law school grades from B’s to A’s. Martoma awarded himself A grades in Civil Procedure, Contracts, and Criminal Law, rather than the B, B+, and B he’d earned, according to a Harvard Administrative Board report. He then sent the forged transcript to nearly two dozen judges when he applied for federal clerkships.

Then, during a Harvard disciplinary hearing to determine whether he should be expelled, Martoma reportedly tried to cover his tracks by creating a fake paper trail that included fabricated emails and a counterfeit report from a computer forensics firm that Martoma had created to help conceal his activities. Martoma reportedly told law school administrators that he had falsified his transcript as a joke and did it mainly to impress his parents.

After Harvard kicked him out, Martoma, who at the time was known as Ajai Mathew Thomas, legally changed his name to Mathew Martoma in 2001, the same year he entered Stanford. It is not known what name Martoma used on his Stanford application. A professor then at Duke University, where Martoma earned his undergraduate degree, had described him in a recommendation letter to Stanford as “extraordinarily intelligent,” ”remarkably analytic” and “wonderfully fair-minded.”

ACCEPTED TO STANFORD BY ADMISSIONS DIRECTOR MARIE MOOKINI

When he applied to Stanford’s MBA program, the director of admissions was Marie Mookini, now an admissions consultant at The Admission Advisory Group in Palo Alto. From August of 1991 to May of 2001, she was responsible for the recruitment, admission and enrollment of the school’s MBA classes.

In all probability, Mathew Martoma slipped through the cracks because he simply lied about important details on his application and Mookini failed to check those facts or omissions. It’s not as if Stanford didn’t have the resources to perform a background check at the time. On her LinkedIn profile, Mookini says she managed a budget of “close to $2 million” and had a mandate “to increase the intellectual caliber of the applicant pool.” (She also claims credit for raising the incoming class average GMAT to more than 700.)

A dozen years ago, however, few if any schools routinely ran background checks on applicants. None used Google or social media to investigate MBA candidates. “Adcoms have raised security in the past five years or so and it is now routine for admitted kids to go thru some nominal check after admission and before matriculation,” says Sandy Kreisberg, founder of HBSGuru.com, an admissions consulting firm.

In fact, last year Stanford rescinded acceptance offers to two prospective students who failed to tell the school they had graduated from other grad schools with degrees. Instead, they claimed to have been working or otherwise occupied during that time. “There was no issue had it been disclosed,” Stanford Admissions Director Derek Bolton told The Wall Street Journal.  “The issue was the deception.”