| NEW YORK, Sept 4
NEW YORK, Sept 4 A federal judge on Thursday
refused to throw out the insider trading conviction of former
SAC Capital portfolio manager Mathew Martoma, saying the trial
evidence "overwhelmingly demonstrated Martoma's guilt."
The decision from U.S. District Judge Paul Gardephe, who
oversaw the trial earlier this year, was in response to a
request from Martoma and came ahead of his sentencing on Monday
on conspiracy and securities fraud convictions.
A jury found Martoma, 40, guilty in February of engaging in
what prosecutors claimed was the most lucrative insider trading
scheme in history, enabling SAC to make profits and avoid losses
of $275 million in trades in Elan Corp and Wyeth.
Elan was acquired last year by Perrigo Company Plc,
while Wyeth is now a unit of Pfizer Inc.
SAC itself pleaded guilty last year to insider trading and
agreed to pay $1.8 billion to settle criminal and civil charges.
Martoma was convicted of trading on confidential tips from
two doctors about a clinical trial for an Alzheimer's drug that
was eventually deemed ineffective.
In addition to refusing to toss Martoma's conviction,
Gardephe denied his request for a new trial. The judge rejected
his contention that the key government witness - Sidney Gilman,
a doctor who testified as part of a cooperation deal that he had
given Martoma the clinical results - was unreliable.
"To the contrary, Dr. Gilman's account was - as to the key
issues - supported by strong circumstantial evidence," Gardephe
Martoma also claimed the jury was tainted by widespread
media reports regarding his expulsion from Harvard for doctoring
But Gardephe said there was no evidence any juror had been
exposed to that information.
Martoma's defense lawyer, Richard Strassberg, did not
immediately respond to a request for comment.
Manhattan U.S. Attorney Preet Bharara has recommended a
"substantial" prison term beyond the eight years recommended by
probation officers, according to court filings.
An eight-year term would be among the stiffest insider
trading penalties handed down in recent years. Lawyer Matthew
Kluger received the longest U.S. insider trading sentence at 12
years after pleading guilty in 2011 to participating in a $37
Martoma is one of eight SAC employees to be convicted of
insider trading. SAC's founder, Steven A. Cohen, has not been
The firm has changed its name to Point72 Asset Management
and no longer manages outside money, instead focusing on Cohen's
The case is U.S. v. Martoma, U.S. District Court for the
Southern District, No. 12-973.
(Reporting by Joseph Ax; editing by Andrew Hay)