SAC’s Martoma: U.S. must disclose evidence in his favor

Dec 27, 2013 @ 7:25 am

SAC's Mathew Martoma
+ Zoom
SAC's Mathew Martoma (Bloomberg News)

Former SAC Capital Advisors LP portfolio manager Mathew Martoma asked a judge to force the government to turn over evidence that he says can help him beat insider trading charges as his case goes to trial next month.

Mr. Martoma in a request filed Thursday in federal court in Manhattan said prosecutors have failed to provide him with communications between the government and lawyers for the two scientists who allegedly gave him non-public information about drug trials and who will be key government witnesses.

Mr. Martoma, 39, is scheduled to go on trial Jan. 6, weeks after a federal jury found another former SAC manager, Michael Steinberg, guilty of using illegal tips to trade stocks of technology companies. Last month, SAC agreed to plead guilty and pay a record $1.8 billion for perpetrating an insider-trading scheme stretching back to 1999.

Prosecutors in the case against Mr. Martoma claim SAC liquidated its $700 million stake in Wyeth and Elan Corp. in July 2008 and then shorted the stocks, within a week of Mr. Martoma obtaining confidential information about negative test results from a clinical trial on bapineuzumab, a drug intended to treat Alzheimer’s disease.

In Thursday's filing, Mr. Martoma said the two scientists, Sidney Gilman and Joel Ross, initially told the government they weren’t involved in passing insider information to him. Martoma said those assertions contradict the charges against him.

“Both Dr. Gilman and Dr. Ross received nonprosecution agreements in exchange for their testimony against Mr. Martoma,” according to the filing. “Mr. Martoma reasonably believes that the government must have communicated with counsel for Drs. Gilman and Ross regarding potential criminal charges in the absence of their cooperation.”

The discussions between the government and the lawyers for the two men are “material, exculpatory information” that must be disclosed, Mr. Martoma said.

Manhattan U.S. Attorney Preet Bharara said after SAC’s plea that his investigation of the Stamford, Conn., hedge fund’s employees continues and that the firm’s plea agreement doesn’t provide any individual immunity from prosecution.

While SAC’s billionaire founder Steven Cohen, 57, hasn’t been charged with a crime, the U.S. Securities and Exchange Commission filed an administrative action against him in July.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Orion's Eric Clarke: What's new at Fuse 2017

Gadget Girl is back on the scene at Fuse with Orion's CEO, Eric Clarke. A new year means new themes and new fintech entrants. Find out what has Orion excited.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

HighTower faces pressure to let investors cash out

After an IPO planned for last year didn't happen, the company could opt to satisfy its backers with a sale.

Envestnet to buy FolioDynamix

The deal, which is expected to close in the first quarter of 2018, will bring the total assets Envestnet works with to almost $2 trillion.

Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry

After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print