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Reuters

Mathew Martoma, a former portfolio manager at billionaire Steven Cohen's SAC Capital Advisors hedge fund, has been sentenced to nine years in prison for engaging in what authorities called the most lucrative insider trading scheme in US history.
US District Judge Paul Gardephe in New York on Monday also ordered Martoma, 40, to forfeit US$9.3 million.
Prosecutors accused Martoma of making illegal trades in pharmaceutical stocks based on tips about a clinical trial for an Alzheimer's drug.
They said those trades enabled SAC to generate about US$275 million of illegal gains.
"There was nothing accidental about Mr Martoma's conduct or the gain realised," Gardephe said.
"I cannot and will not ignore that the gain is hundreds of millions of dollars more than ever seen in an insider trading prosecution."
A federal jury convicted Martoma, who worked in SAC's CR Intrinsic Investors unit, in February of securities fraud and conspiracy.
He had faced up to 20 years in prison under federal guidelines. Prosecutors sought a term longer than the eight years recommended by the court's probation department.
Martoma's lawyers have promised an appeal.
The nine-year sentence is among the longer prison terms in US insider trading cases, reflecting a trend of increasingly lengthy sentences in recent years.
In 2012, corporate lawyer Matthew Kluger was sentenced in New Jersey to 12 years in prison for trading on information from law firms about mergers.
In 2011, Galleon Group hedge fund founder Raj Rajaratnam was sentenced in New York to 11 years in prison.
The case against Martoma stemmed from a broad investigation of insider trading at SAC.
Eight employees have been convicted or pleaded guilty and SAC last year agreed to pay US$1.8 billion in criminal and civil settlements and plead guilty to fraud charges.
SAC recently changed its name to Point72 Asset Management, and the Stamford, Connecticut-firm was transformed into a family office managing Cohen's fortune.
Prosecutors said Martoma sought out confidential information from doctors involved in a clinical trial of an Alzheimer's drug being developed by Elan, since acquired by Perrigo, and Wyeth, now a unit of Pfizer.
Based on a tip Martoma received from Sidney Gilman, a former University of Michigan professor who chaired the drug's safety monitoring committee, SAC Capital in July 2008 began selling its US$700 million position in Elan and Wyeth, prosecutors said.
They said most of the trading occurred in accounts controlled by Cohen, who had a 20-minute phone call with Martoma after receiving information about the negative results of the study.
Cohen has not been criminally charged.


Ex-SAC fund manager Mathew Martoma sentenced to nine years for insider trading

Mathew Martoma is accused of making illegal trades in pharmaceutical stocks based on tips about a clinical trial for an Alzheimer's drug.

News

World

Ex-SAC portfolio manager to forfeit US$9.3m over illegal dealings that earned about US$275m


Mathew Martoma, a former portfolio manager at SAC Capital Advisors hedge fund, has been sentenced to nine years in prison for engaging in what authorities called the most lucrative insider trading scheme in US history.
