SAC Capital's Martoma found guilty of insider trading

Fri Feb 7, 2014 2:55am EST
 
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By Nate Raymond

NEW YORK (Reuters) - Mathew Martoma, a former portfolio manager at billionaire Steven A. Cohen's SAC Capital Advisors hedge fund, was found guilty on Thursday of engaging in what prosecutors called the most lucrative insider trading scheme in U.S. history.

A federal jury in New York found Martoma guilty on all three of the conspiracy and securities fraud charges that he faced, over a scheme that allowed SAC Capital to make profits and avoid losses of $275 million.

The verdict was the eighth insider trading conviction of a current or former employee at SAC Capital, a $14 billion hedge fund that has long been in the cross-hairs of the FBI and Preet Bharara, the U.S. Attorney in Manhattan.

Martoma gave no apparent reaction as the verdict was read. His wife, Rosemary, sat up in her seat in court as the verdict was read, with tears going down her face. They exited the court holding hands.

As news photographers snapped pictures, Martoma walked stone-faced out of the courthouse and into a waiting SUV with his wife and defense team. They did not speak to reporters.

"We are very disappointed and we plan to appeal," Richard Strassberg, Martoma's lawyer, said through a spokesman.

U.S. District Judge Paul Gardephe did not immediately set a sentencing date. Martoma, 39, could face a maximum 45 years in prison, although the highest sentence to date in an insider trading case is 12 years.

The verdict came after a different jury in the same courthouse in December convicted Michael Steinberg, a portfolio manager at SAC Capital, on five conspiracy and securities fraud counts for his role in a separate insider trading scheme.   Continued...

 
Former SAC Capital Advisors portfolio manager Mathew Martoma walks out of the courthouse in downtown Manhattan, New York, February 6, 2014. REUTERS/Eduardo Munoz