Monday, 30 May 2016
Last updated 2 days ago
Jan 8 2014 | 12:30pm ET
Among the first things that the jury pool in the trial of former SAC Capital Advisors portfolio manager Mathew Martoma's trial heard was the name of Martoma's former boss.
"The owner of SAC Capital is a man named Steven A. Cohen," U.S. District Judge Paul Gardephe intoned to the 80 prospective jurors in his courtroom yesterday. Martoma's trial on insider-trading charges formally opened with those jurors completing a written questionnaire asking, among other things, whether they had "strong feelings" about hedge funds and whether they had heard of SAC or Cohen.
Cohen has not been accused of criminal wrongdoing in the case—but he is likely to be more prominent in Martoma's trial than he ever has in a previous legal proceeding. Prosecutors plan to discuss Martoma's phone calls with Cohen, while Martoma's lawyers want the jury to hear Cohen's testimony at a deposition last year in which the billionaire asserts his trades of the stocks in question at the Martoma trial weren't made based on Martoma's advice.
Cohen's centrality is fitting, given that Martoma appears to be as close as federal prosecutors have gotten to the SAC founder during their years'-long investigation, which has netted eight people with ties to SAC among the more than 80 charged with insider-trading. Indeed, prosecutors have sought Martoma's cooperation in building a case against Cohen for more than a year, blandishments which Martoma has thus far rejected.
Jury selection is expected to wrap up today, with opening statements coming as soon as this afternoon. Gardephe warned members of the pool to avoid media reports about SAC and the case, noting, "we do not try people based on what is said in the press." Jurors left the courtroom after completing the questionnaire.
Martoma, who was in the courtroom with his wife yesterday, faces up to 45 years in prison if convicted of the conspiracy and securities fraud charges, in what prosecutors have called the "most lucrative" insider-trading scam in history. Martoma is accused of earning or saving SAC some $276 million illegally trading two pharmaceutical company shares based on information about drug trials he received from two doctors. His is the second SAC insider-trading trial in as many months, following last month's conviction of SAC trader Michael Steinberg, the highest-ranking SAC employee to face charges so far.
Martoma's trial, which is expected to last three weeks, will begin in earnest with the testimony of former SAC trader Tim Jandovitz. Jandovitz spent part of his five years at SAC as Martoma's analyst.
After leaving SAC, Jandovitz started a restaurant in Chicago, serving sandwiches made with Belgian waffles. He closed Bel 50 in May and went back to Wall Street, now working at Jefferies Strategic Capital.