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

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.
DEC 27, 2013
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)

Latest News

Merrill lands four advisor teams as May recruiting data shows firm's two-way churn
Merrill lands four advisor teams as May recruiting data shows firm's two-way churn

Merrill's latest hires span Colorado to Louisiana, even as industry-wide recruiting data suggests the firm is losing almost as many advisors as it gains.

Fund manager sues Kandeo, alleges $100 million FinSocial loss
Fund manager sues Kandeo, alleges $100 million FinSocial loss

The $36 million buy allegedly hid inflated books and a $50 million diversion.

Advisor gets $200,000 from Ameriprise in 'emotional distress' lawsuit
Advisor gets $200,000 from Ameriprise in 'emotional distress' lawsuit

“An award citing emotional distress is very unusual,” an industry executive said.

Workplace financial education linked to stronger financial habits, but participation remains low
Workplace financial education linked to stronger financial habits, but participation remains low

New EBRI research found workers who participated in employer financial education reported higher confidence, literacy and financial satisfaction.

The rise of the super advisor: How AI is redefining competitive advantage in wealth management
The rise of the super advisor: How AI is redefining competitive advantage in wealth management

Beyond operational excellence, the winning advisors of the future are the ones who can reach across multiple disciplines without discarding specialist skills.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income