Martoma Sentencing Postponed Until Late July

Jun 11 2014 | 8:47am ET

Former SAC Capital Advisors trader Mathew Martoma has won almost two more months of freedom as his attorneys fight what could be the longest insider-trading sentence in history.

Martoma was originally to be sentenced yesterday. Now, he’s set to learn his fate on July 28—an extended delay that has created speculation he may be seeking a deal with prosecutors.

Martoma, who was convicted of earning SAC $276 million illegally trading pharmaceutical shares, was entitled to a 10-day delay due to the lateness of the Manhattan federal court’s probation department sentencing report. But the severity of its recommendation—at least 15 years, 8 months, up to nearly 20 years—led Martoma’s lawyers to seek the longer postponement.

The convicted hedge fund manager’s legal team called the recommendation, which would be the longest insider-trading sentence in history by a wide margin, “outrageous,” suggesting Martoma should get no more than two or three years.

Martoma has to date refused to do a deal with prosecutors, who would probably require that he implicate SAC founder Steven Cohen. SAC itself has pleaded guilty to insider-trading charges and become a family office called Point72 Asset Management, and Cohen faces Securities and Exchange Commission charges that he failed to supervise his employees. But, in spite of years of effort, authorities have to date failed to build a criminal case against the billionaire.

Martoma’s case was widely seen as their best chance: His is the only one of the more than half-dozen cases involving SAC managers that offered a direct link to Cohen, a 20-minute phone call after Martoma allegedly received his insider information. One of his sources, medical professor Sidney Gilman, testified during Martoma’s trial that the Federal Bureau of Investigation made clear they were not after him or Martoma, but were “really after a man named Steven A. Cohen.”


In Depth

Q&A: George Schultze On His Fund's Unique Approach to Distressed Investing

Apr 16 2015 | 1:01am ET

George Schultze is a managing member of Schultze Asset Management, a long/short...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note