Trial begins today for Martoma, who faces up to 45 years in jail if convicted.
By Deepak Chitnis
WASHINGTON, DC: The federal trial against former SAC Capital Advisors portfolio manager Mathew Martoma begins today, including jury selection, and things have already began heating up, as prosecutors have deposed a number of Martoma’s former colleagues over the past few months.
Martoma, 39, is facing trial for allegations that he engaged in insider trading, profiting as much as $276 million from privileged information he received from doctors involved in the clinical trials of a new drug. The insider trading allegedly took place around July of 2008, and if convicted, Martoma faces up to 45 years in prison.
While it was known that the government had deposed Martoma’s former co-workers, had been interviewed by investigators as early as May of 2012, the exact number was not known. It’s now been revealed that more than 12 former colleagues have given testimony regarding Martoma’s activities at SAC.
Some victories for Martoma came yesterday, however, when US District Judge Paul Gardephe ruled that Martoma allegedly fainting when confronted by federal agents in 2011 could not be used by the prosecution. The government planned to insinuate that Martoma fainted when FBI agents came to arrest him in 2011 because he knew he was guilty, but the judge ruled that being arrested is a traumatic event regardless of if the accused is guilty or innocent.
The prosecution has also been barred from using evidence it obtained which they claim proves that Martoma hired a research analyst to get confidential information about the aforementioned drug, in order to further evaluate the product just before its clinical trials were scheduled to take place.
Gardephe ruled that the evidence did not illustrate a clear intent on Martoma’s part, and therefore was inadmissible for the purposes of the federal prosecution.
A resident of Boca Raton, Florida, Martoma was fired in 2010 by SAC. Arrested in 2011, he was offered the chance to cut a deal with prosecutors by assisting them in their investigation of fellow hedge fund manager Steven A. Cohen, in exchange for a reduced sentence and other penalties; Martoma declined. Martoma is married with three children, and has maintained his innocence throughout legal proceedings.
His trial is scheduled to last around three weeks. There have been some indications that prosecutors are still willing to cut some sort of deal with Martoma, though it would be considerably less generous than what was initially offered. Despite this, Martoma’s legal team has said that they will fight for their client’s innocence throughout the trial, and have no intention of speaking with investigators.
To contact the author, email to deepakchitnis@americanbazaaronline.com