Ex-SAC trader points to Cohen testimony in insider trading case

Sat Dec 7, 2013 12:48pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Nate Raymond

(Reuters) - A former SAC Capital Advisors trader, set to go on trial next month on insider trading charges, wants to cite in court some 2012 testimony given by the hedge fund's founder Steven Cohen, claiming it rebuts the government's case.

Mathew Martoma, the ex-SAC portfolio manager is scheduled for trial on January 6. He filed court papers late Friday seeking to use testimony given by Cohen to the U.S. Securities and Exchange Commission in May 2012.

Martoma contends the testimony will show he had nothing to do with decisions to trade in Elan Corp and Wyeth in 2008.

Filed in U.S. District Court in New York, the Martoma documents showed how extensively investigators questioned Cohen about the trading at the center of the case against Martoma, who was charged in November 2012 with insider trading in what is said to be the most lucrative such U.S. scheme ever.

Prosecutors contend Martoma got nonpublic information from a physician about a clinical trial of an Alzheimer's drug, and then used that information to help CR Intrinsic Investors, an SAC division, avoid $276 million in losses through the sale of securities for Elan and Wyeth, now owned by Pfizer Inc.

Martoma's case will go before a jury not long after the expected conclusion of a trial in New York of another SAC portfolio manager, Michael Steinberg. He is accused of trading in Dell Inc and Nvidia Corp, based on inside information.

Once a $14 billion hedge fund, SAC Capital agreed last month to pay $1.2 billion and plead guilty to fraud charges as part of the insider trading probe. Cohen, who has not been criminally charged, faces an SEC administrative action accusing him of failing to supervise Martoma and Steinberg and prevent insider trading.

WAVE OF PRE-TRIAL MOTIONS   Continued...

 
Mathew Martoma leaves Manhattan Federal Court after facing charges on an insider trading scheme in New York August 23, 2013. REUTERS/Andrew Kelly