Thursday, 28 July 2016
Last updated 7 hours ago
May 29 2014 | 9:37am ET
Probation officials have recommended that former SAC Capital Advisors portfolio manager Mathew Martoma receive the longest-ever sentence for insider trading, a suggestion that Martoma’s lawyers called “outrageous.”
The U.S. District Court in Manhattan’s probation department said that Martoma’s crimes—prosecutors called it the largest insider-trading scheme in history, netting SAC some $276 million in illicit gains—called for a sentence of between 15 years, eight months and 19 years, seven months. To date, the longest insider-trading sentence in history was 12 years, imposed on Matthew Kluger in 2012.
The probation officials cited the size of Martoma’s scheme, of which he was convicted in February, for the draconian recommendation. But Martoma’s lawyers cried foul, arguing that the scale of the crime in given too much weight.
Martoma’s crimes were “far narrower in many important respects than the unlawful trading in nearly all other recent insider trading cases,” his lawyer, Richard Strassberg, wrote, making a sentence in excess of 15 years “outrageous” and “irrational.” Strassberg pointed to the 11-year sentence imposed on Galleon Group founder Raj Rajaratnam, whose crimes Martoma’s do “not even begin to approach.”
“Indeed, his charged conduct is less serious by most measures than those defendants who received between two to three years imprisonment,” he continued. “Mr. Martoma should receive a sentence reflecting that fact. And, of course, Mr. Martoma’s charged conduct is not even in the same ballpark as Raj Rajaratnam’s,” whose scheme lasted years and included many more than the two stocks Martoma is accused of illegally trading, as well as many more co-conspirators.
Martoma’s filing also includes about 100 letters of support, and a request that Martoma’s expulsion from Harvard Law School for doctoring his transcript should not be considered.
“Mr. Martoma has made mistakes but, as the many letters of friends, family, colleagues and acquaintances show, he is a good person,” Strassberg wrote.
Martoma is set to be sentenced on June 10.