Ex-SAC trader Martoma seeks to toss insider trading conviction

Fri Feb 28, 2014 11:01am EST
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By Jonathan Stempel

NEW YORK (Reuters) - Former SAC Capital Advisors LP portfolio manager Mathew Martoma asked a U.S. judge to throw out his insider trading conviction, saying federal prosecutors did not prove he committed a crime and that improper evidence and jury bias tainted the verdict.

The request submitted late Thursday night in the U.S. District Court in Manhattan was expected. It followed Martoma's February 6 conviction on two counts of securities fraud and one count of conspiracy.

"This court should enter a judgment of acquittal on all counts," Martoma, 39, told U.S. District Judge Paul Gardephe, who presided over the roughly month-long trial, in the filing. In the alternative, Martoma said he deserves a new trial.

A spokeswoman for U.S. Attorney Preet Bharara in Manhattan did not immediately respond on Friday to a request for comment.

Martoma was accused of seeking and trading on confidential information about a clinical trial involving Ireland's Elan Corp and Wyeth, now part of Pfizer Inc, over an experimental drug to treat Alzheimer's disease.

Prosecutors said his trades enabled SAC, a hedge fund run by billionaire Steven A. Cohen, to generate profit and avoid losses of $275 million from trades in Elan and Wyeth before the trial's results were announced in July 2008.

Martoma had worked in SAC's CR Intrinsic Investors unit. Based on recent sentences in insider trading cases, he could face several years in prison when he is sentenced on June 10.

Eight people who once worked for SAC have been convicted of or pleaded guilty to insider trading. SAC no longer manages outside money, and now oversees Cohen's $9 billion fortune. Cohen has not been criminally charged.   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