Mathew Martoma, the former SAC Capital Advisors trader found guilty of insider trading, was stripped of his degree from Stanford Graduate School of Business, the first time the school is believed to have revoked a graduate degree.

Martoma Stanford

Failure to disclose previous expulsion from Harvard Law School

At issue is the fact Martoma was expelled from Harvard Law School for falsifying his transcript grades, according to court documents unsealed in advance of Martoma’s insider trading trial. According to a report in the Wall Street Journal, which initially broke the story, Stanford has provisions for revoking degrees or acceptance offers if a student is found to have gained admission through false pretenses. While Stanford spokeswoman Barbara Buell declined to comment on Martoma’s record, citing privacy laws, she was quoted as saying, “We take very seriously any violation of the integrity of our admissions process,” likely providing a key clue as to the reason for the revocation of Martoma’s degree.

Speaking to the New York Times Buell further clarified: “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.”  The Times noted that if Martoma had accurately completed the application, informing Standford admissions officials that he had forged grade transcripts, it would create a “serious impediment” to a candidate’s admission, according to a person familiar with Stanford’s admission process but not authorized to discuss it publicly.

The Journal report noted that all applicants must sign a statement acknowledging that Stanford can withdraw an offer of admission if the candidate has misrepresented his or her credentials or engages in behavior “that indicates a serious lack of judgment or integrity” before arriving on campus, among other criteria.  With their signatures, applicants are also confirming that all of the information in their applicants are their own work and, “to the best of your knowledge, complete and accurate.”  The revocation of the degree could not be directly tied to the fact he was a convicted felon, the report said, citing an unidentified Stanford faculty member as a source.

Stanford decision comes after University of Chicago stripped Fabrice Tourre of prestigious teaching position

Stanford’s revocation of Martoma’s degree comes as the University of Chicago recently stripped Fabrice Touree, a former Goldman Sachs Group Inc (NYSE:GS) employee found liable of defrauding investors, of a prestigious honors teaching position, reported in yesterday’s ValueWalk. This decision has been largely unexplained by the university.  “As preparations continue for the Spring Quarter, Fabrice Tourre will no longer be assigned as an instructor for Honors Elements of Economic Analysis in the College,” Jeremy Manier, a university spokesman, was quoted as saying in the Wall Street Journal.  The report said the move “was an abrupt change, considering Mr. Tourre, nicknamed as the “Fabulous Fab,” had been slated to begin teaching the course during the spring quarter, which begins later this month.”