Lawyers Spar Over Martoma's Fainting Spell

Jan 2 2014 | 11:46am ET

Former SAC Capital Advisors portfolio manager Mathew Martoma famously fainted on his lawn when approached by the Federal Bureau of Investigation in 2011, but his lawyers want to make sure a jury never hears about the episode.

Martoma collapsed on his Florida lawn when FBI agents dropped by to question him about the alleged insider-trading he now stands accused of. Despite his weak-kneed reaction that November day, Martoma has refused to cooperate or implicate SAC founder Steven Cohen in exchange for a deal.

Martoma is set to stand trial on Monday for trading shares of two pharmaceutical companies based on confidential information about drug trials. Prosecutors have called his efforts the "most lucrative" insider-trading scheme in history. And they say his fainting is proof that he knew he was committing a crime.

Prosecutors said late last month that Martoma's collapse is "evidence of his consciousness of guilt," noting that he didn't pass out initially, when the agents lied to him and told him they wished to speak about a former SAC colleague. Martoma allegedly fainted only after the FBI agents said they were actually investigating his allegedly illicit trading.

The former hedge fund manager's  lawyers countered, "evidence of Mr. Martoma's fainting is not probative of his guilt or innocence and would serve only to distract the jury with sensational but irrelevant facts." They asked the judge in the case to bar mention of the incident before the jury.

Martoma's legal team is also seeking to exclude evidence that Martoma was fired by SAC in 2010. Prosecutors say that SAC's alleged refusal to pay Martoma's bonuses in 2009 and 2010 "demonstrated viscerally what Martoma understood, in 2006-2008, what would happen if he did not find a way to make money for the firm." Martoma's lawyers dismissed the argument as a "logical fallacy" and "non-sequitur."


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