| NEW YORK
NEW YORK Feb 4 A jury began deliberating on
Tuesday on whether to convict Mathew Martoma of insider trading
stemming from trades made while working at Steven A. Cohen's SAC
Capital Advisors hedge fund, in what prosecutors called the most
lucrative such scheme in U.S. history.
U.S. District Judge Paul Gardephe in Manhattan spent the
morning instructing the seven women and five men on the jury
before they began their deliberations. Jurors include a bus
driver, an employment lawyer and a film professor.
Martoma, 39, is accused of from 2006 to 2008 seeking out
confidential information from doctors involved in a clinical
trial for an Alzheimer's disease drug being developed by Elan
Corp Plc and Wyeth, now owned by Pfizer Inc.
Prosecutors said SAC Capital began selling off its $700
million position in Elan and Wyeth in July 2008, based on a tip
Martoma got from a doctor, Sidney Gilman, about negative trial
results for the drug that were not made public until later that
month. Thanks to the trades, SAC Capital made profits and
avoided losses of $275 million, prosecutors say.
Most of the trading took place in accounts controlled by
Cohen, who prosecutors say Martoma had a 20-minute phone call
with after receiving information about the negative results.
Martoma, a former portfolio manager at SAC, denies
wrongdoing. His lawyer Richard Strassberg told jurors Monday
that prosecutors erred in charging his client "in their haste to
make a case against someone who is not even in this courtroom:
Mathew Martoma's boss, Steven Cohen."
Cohen, 57, has not been criminally charged. But the U.S.
Securities and Exchange Commission is seeking to bar Cohen from
the financial services industry for failing to supervise Martoma
and Michael Steinberg, another portfolio manager convicted in
December on insider trading charges. Cohen denies wrongdoing.
In total, prosecutors have charged eight current of former
employees at Cohen's hedge fund. SAC Capital last year agreed to
pay $1.8 billion in criminal and civil settlements and plead
guilty to fraud charges stemming from insider trading by its
SAC Capital is scheduled to be sentenced March 14. It is
meanwhile in process of converting into a so-called family
office that will manage Cohen's estimated $9 billion fortune.
The case is U.S. v. Martoma, U.S. District Court, Southern
District of New York, No. 12-cr-00973.