Tuesday, 2 June 2015
Last updated 17 min ago
Jun 6 2013 | 11:29am ET
Mathew Martoma, the former SAC Capital Advisors portfolio manager whose alleged insider-trading has brought that firm to its knees, will face trial later this year on fraud charges.
U.S. District Judge Paul Gardephe said yesterday that Martoma's trial will begin on Nov. 4. He is accused of earning SAC about $276 million in illicit profits trading on tips about Alzheimer's disease drug trials.
Martoma's lawyer, Richard Strassberg, told Gardephe he might need more time, citing both the prosecution's apparent plan to file a superseding indictment and another trial that he is working on.
Strassberg asked Gardephe to set a February trial date. The judge said he was reluctant to do so, but told Strassberg he would postpone the trial if necessary.
"I'm not closing the door to a later trial date, but if you feel, as you get close to your trial date before Judge Rakoff, that you're facing insurmountable difficulties or that you'll still be on trial before Judge Rakoff, you'll alert me to that and I'll make an appropriate adjournment."
Martoma is accused of illegally trading shares of Elan Corp. and Wyeth, based on tips received from a doctor overseeing the drug trials. The doctor, Sidney Gilman, is a former professor at the University of Michigan and is cooperating with the probe.
Strassberg told Gardephe that he might seek to have the charges related to Elan, which is based in Dublin and trades abroad, dismissed, citing a 2010 U.S. Supreme Court ruling that U.S. securities laws do not protect foreign investors who trade overseas.
In addition, Gardephe set a June 18 conference to discuss Michigan's reluctance to give lawyers from both sides access to Gilman's computer at the university, which says it is wary of producing confidential information about drug trials and patients.
"If the university's position is that they want to quash a subpoena, I want a filing from them," Gardephe said.
The case against Martoma is the only one of the nine brought so far against SAC employees that is directly tied to firm founder Steven Cohen. Prosecutors do not, however, allege that Cohen knew the information he got from Martoma was non-public.
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…