Last week, an insider trading drama at SAC Capital, one of the world’s largest hedge funds, hit the front pages. While the world waits to find out if SAC founder Stephen A. Cohen will be charged along with Stephen Martoma, one of his former money managers, we cannot help but wonder if the alumni offices at the Wharton School and the Stanford Graduate School of Business (GSB) are getting a bit antsy. Martoma, a Stanford GSB graduate, and Cohen, a Wharton college graduate, could be trading blows and implicating each other in court, keeping the two schools that educated this duo in the public eye for months. This brewing insider trading scandal comes on the heels of a sensational scandal that has just left the front pages and also involves graduates of top schools. In May 2011, Wharton graduate Raj Rajaratnam was found guilty on 14 counts of conspiracy and securities fraud; his colleague, Rajat Gupta—a graduate of Harvard Business School—was accused of passing tips to Rajaratnam and was recently sentenced to two years in prison. Of course, these schools have tens of thousands of alumni, and painting them all with the same brush would be wrong. Still, the headlines are certainly unwelcome, and these schools would be more than happy to see them recede.
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