* Martoma calls U.S. conspiracy allegations vague
* Defendant accused of insider trading
* SAC, founder Steven Cohen in focus after subpoenas
May 21 Former SAC Capital Advisors portfolio
manager Mathew Martoma said the government is impeding his
ability to defend against criminal insider trading charges by
trying to link him to an alleged long-running conspiracy for
which it has only "vague" details.
In papers filed on Monday night in U.S. District Court in
Manhattan, Martoma said he was seeking more information about
federal prosecutors' case against him.
The previous week, authorities issued subpoenas seeking
testimony from others at SAC Capital, including its founder,
billionaire Steven Cohen.
Several current and former SAC employees have been linked to
insider trading for periods when they worked at the Stamford,
Connecticut-based firm. Martoma and Michael Steinberg, an SAC
Capital portfolio manager on leave from the firm, have pleaded
not guilty to criminal charges.
Prosecutors accused Martoma of helping SAC avoid millions of
dollars of losses by recommending that it sell shares of Elan
Corp and Wyeth, now owned by Pfizer Inc, based
on tips from a doctor about poor results at a drug trial.
In his filing, Martoma said the government's case focuses
only on alleged wrongful trades that took place over seven days
in July 2008.
But he said prosecutors in recent court papers purposely
conflated these trades with an alleged conspiracy described "in
vague terms" and "stretching back in time to late 2006" that
gave him "an edge."
Martoma said that to defend against this alleged conspiracy,
he would effectively be forced to prove the legality of
thousands of other Elan and Wyeth trades by him and SAC, which
are not part of the government's criminal case.
"The result is that the government proclaims its allegations
are narrow and that it need only particularize the limited
information relevant to July 2008, but simultaneously accuses
Mr. Martoma of much more extensive conduct," the filing said.
"The government should not be allowed to have it both ways."
A spokeswoman for U.S. Attorney Preet Bharara in Manhattan
declined to comment.
Martoma said he agrees with a July 31 deadline for the
government to disclose names of all known co-conspirators, so
long as it does not withhold disclosures for strategic reasons.
SAC agreed in March to pay $616 million to settle two U.S.
Securities and Exchange Commission civil lawsuits linked to
alleged insider trading.
Cohen has not been accused of wrongdoing. It is unclear how
the subpoenas will affect outside investors who control roughly
$6 billion of SAC's $15 billion of assets. Investors have this
year asked to redeem $1.7 billion, and have until June 3 to
submit another withdrawal request.
The case is U.S. v. Martoma, U.S. District Court, Southern
District of New York, No. 12-cr-00973.