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.”