Nov. 23 (Bloomberg) -- Mathew Martoma got off to a slow start in the hedge-fund world.

A former student at Harvard Law School, he co-wrote papers on medical ethics before seeking a business degree at Stanford University and joining a little-known Boston hedge fund. Former colleagues say he was nondescript, and other hedge-fund managers never heard of him.

Yet in 2006, at age 32, Martoma made it to SAC Capital Advisors LP and gained the attention of the firms billionaire owner Steven A. Cohen. Cohen, one of the most successful hedge- fund managers in the world, trusted Martomas recommendations enough to accumulate about $700 million in shares of Elan Corp. and Wyeth LLC two years later and then sell them all within a week after Martoma had changed his view on the companies.

Those recommendations, which earned the young portfolio manager a $9.38 million bonus, have now landed Martoma at the center of what U.S. prosecutors describe as the most-lucrative insider-trading scheme theyve ever uncovered, with profits and averted losses of $276 million. Early in the morning of Nov. 20, FBI agents arrested the 38-year-old at his Boca Raton home. The charges against him mark the first time prosecutors said Cohen had talked with a defendant about stocks in an insider-trading case, pulling the art collector deeper into one of the biggest investigations of securities fraud in history.

Mathew Martoma was an exceptional portfolio manager who succeeded through hard work and the dogged pursuit of information in the public domain, his lawyer Charles Stillman said in an e-mailed statement, adding that he expected Martoma to be fully exonerated.

Martoma grew up in Florida, according to social security and voter registration records. As an 18-year-old, he lived in Merritt Island, Florida, less than 10 miles from Cape Canaveral, where NASAs Kennedy Space Center is located. His mother, Lizzie Thomas, was a doctor, according to public records. His father, Bobby Martoma, owned a dry cleaner until two years ago.

Mathew Martoma got his undergraduate degree at Duke University in Durham, North Carolina, according to the university registrar. During his first year, he was inducted into Phi Eta Sigma, an honors society for freshmen who attain at least a 3.5 grade point average, according to the university registrar. He graduated in December 1995.

Less than two years later, he went off to Harvard Law School in Cambridge, Massachusetts. He wrote two medical-ethics papers, one of which identifies him as a member of Harvard Laws class of 2000 and as the former deputy director of the National Human Genome Research Institutes Office of Genome Ethics.

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Insider Trading Suspect Matthew Martoma Studied Medical Ethics Before Joining A Hedge Fund