A former portfolio manager at SAC hedge fund, Mathew Martoma was convicted by a New York jury on February 6, 2014 on two counts of securities fraud and one count of conspiracy.
Martoma is currently out on bond and awaiting sentencing.
Martoma – Hard Road Ahead
Mathew Martoma filed a motion with the U.S. District Court in New York on February 27, 2014 asking for acquittal or retrial on several grounds including that the government failed to prove beyond a reasonable doubt that he obtained material nonpublic information.
In its response to Martoma’s motion on March 21, 2014, the government made a strong case that Martoma obtained material non-public information, traded on material non-public information, had criminal intent and conspired to engage in insider trading.
In a 33-page filing, the U.S. Attorney’s Office for the Southern District of New York (headed by Indian-American Preet Bharara) contended that none of Martoma’s claims for a retrial “have any merit, and are a realm apart from the true miscarriages of justices that could warrant the extraordinary remedy of a new trial.” [p.20]
The Government’s evidence at trial amply supports the jury’s conclusion that the defendant committed insider trading with respect to Elan and Wyeth stock, and that he conspired with Dr. Gilman and Dr. Ross to do so. Martoma’s claim to the contrary distorts or ignores important evidence presented at trial, and draws from this evidence the inferences most favorable to the defendant rather the Government. Accepting the evidence presented at trial as credible and drawing all reasonable inferences therefrom — as this Court must — more than suffices to establish the defendant’s guilt as to all three counts of the Indictment. [p.5]
The government dismissed as “worse than speculative” Martoma’s claims of jury bias over news of his dismissal from Harvard Law School.
Out on Bond
Currently out on bond, Mathew Martoma’s sentencing is set for June 10, 2014.
Court filings show Martoma has been released on a personal recognizance bond of $5 million, secured by $2 million cash and/or real property.
Martoma has also been asked to surrender his passport, as well as those of his minor children. His travel has been restricted to the Southern District of New York, Eastern District of New York, Florida (all districts), and the districts of Massachusetts and New Jersey.
The government is expected to seek a lengthy prison term for Mathew Martoma in addition to forfeiture of his assets.