Monday, 27 June 2016
Last updated 4 hours ago
Jan 9 2014 | 2:08pm ET
After two days, there is still no jury empanelled to hear the case against former SAC Capital Advisors portfolio manager Mathew Martoma. But when there is, it won't hear excerpts from SAC founder Steven Cohen's deposition last year.
Martoma's lawyers had sought to admit the deposition, arguing that it exonerated their client by showing that Cohen made trades in two pharmaceutical companies based on the recommendations of former SAC trader Wayne Holman, and not at Martoma's urging. But U.S. District Judge Paul Gardephe said yesterday that the deposition does no such thing, and is inadmissible anyway.
Gardephe called the deposition's characterization by Martoma's lawyers "not accurate," and in fact could incriminate their client.
"According to Cohen, Martoma played a significant role in his decision to buy Elan and Wyeth stock, and it was Martoma's discomfort with the Elan position on July 20, 2008, that was the impetus for selling the position," Gardephe wrote. Prosecutors have alleged that Martoma urged Cohen to sell the stocks after learning from a doctor overseeing a clinical drug trial that it was not going well.
"While the defendant asserts Cohen testified that Martoma had 'nothing to do with' Cohen's decision to sell the Wyeth position, Cohen actually said no such thing."
Not that the details matter: "Even if Cohen had testified that Martoma played no role in SAC's decision to sell its Wyeth and Elan stock and to sell short these securities—an assertion that is not supported by a review of Cohen's deposition transcript—this court would of course not be required to accept Cohen's account," the judge wrote.
Gardephe yesterday also expressed frustration with the jury-selection process, warning that it may force him to delay opening statements in the case by another day. Gardephe dismissed 26 potential jurors yesterday from an initial pool of 80. He will continue to question the remaining members of the pool today, but warned he may need to bring in a fresh jury pool to fill out the 12-member panel.
Prosecutors have called Martoma's alleged crimes the "most lucrative" insider-trading scam of all time, one which earned or saved SAC some $276 million. He faces up to 45 years if convicted—as all of the nearly 80 accused insider-traders to go to court in recent years have been.