MBA News: Stanford GSB Revokes MBA from SAC Capital’s Martoma

In addition to facing possible prison time for insider trading, former SAC Capital trader Mathew Martoma will apparently lose his MBA credentials. Speculation as to whether administrators at the Stanford Graduate School of Business (GSB) would retaliate against their alumnus first arose several weeks ago, when Martoma made headlines for falsifying transcripts. The school confirmed on Tuesday that Martoma’s offer of admission to the GSB has been officially rescinded in light of evidence that he failed to disclose his prior expulsion from Harvard Law School. According to the Wall Street Journal, the decision will effectively strip Martoma of his MBA degree, as the school distances itself from the disgraced trader.

Nonetheless, a graduate degree is probably the least of Martoma’s worries, considering he faces a sentence of up to 20 years in prison. Martoma was convicted on two counts of securities fraud at the beginning of February—though he filed a request last week asking the judge to overturn the verdict or allow a retrial.

Revoking an MBA is quite rare, but Martoma is not the first graduate of a top-ranking business school to become embroiled in a highly publicized scandal. The Wall Street Journal cites Wharton alumnus Raj Rajaratnam, who was convicted of securities fraud in 2011, and former Enron CEO Jeffrey Skilling, a Harvard Business School alumnus who was similarly convicted on insider trading charges. The GSB has not commented on Martoma’s academic record, though a spokeswoman for the school stated, “We take very seriously any violation of the integrity of our admissions process.” The Martoma debacle is perhaps the most vivid illustration in recent memory of the potential consequences of professional and academic dishonesty. 

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