NEW YORK (Reuters) - Mathew Martoma, the latest employee of Steven A. Cohen’s SAC Capital Advisors to face trial on insider trading charges, lost a bid on Friday to delay his trial, which is scheduled to start on January 6.
Martoma’s lawyer, Roberto Braceras, told U.S. District Judge Paul Gardephe in New York that the conviction of SAC portfolio manager Michael Steinberg on Wednesday had ignited a new round of media stories that often mentioned Martoma, raising the possibility jurors could be tainted by the coverage.
He asked for a two-week delay, adding that they needed the extra time to prepare for trial in light of several pending motions.
But Gardephe said he had already postponed the trial from the autumn to January “extremely reluctantly,” adding that the intense media attention on SAC would likely continue.
“The fact of the matter is, there is a piece of news about SAC nearly every day,” he said.
Martoma’s request was similar to one that Steinberg himself made before his trial began, arguing that SAC Capital’s $1.2 billion guilty plea deal in November had caused too much pretrial publicity.
U.S. District Judge Richard Sullivan denied that request. Steinberg, 41, was found guilty on five counts of conspiracy and securities fraud for trading on insider information.
Martoma, a former portfolio manager, is accused of helping SAC affiliate CR Intrinsic Investors avoid $276 million in losses in 2008 by recommending it sell shares of Elan Corp Plc and Wyeth, based on a doctor’s tips about poor trial results for a diabetes drug. Wyeth is now owned by Pfizer Inc.
U.S. prosecutors charged eight former SAC employees with insider trading as part of a multiyear broad probe into the practice. Martoma is the second to go to trial after Steinberg, while the other six pleaded guilty.
At Friday’s hearing, Gardephe also ruled on a longstanding discovery dispute between Martoma, the government and Sidney Gilman, a doctor who allegedly provided him with tips and who is cooperating with the government.
Gilman had sought to protect numerous files on his laptop and desktop computers and on electronic storage devices as privileged, claiming they were communications with his attorney or his spouse.
But Gardephe ruled Martoma was entitled to copies of virtually all of the documents because Gilman effectively waived the privilege by providing the computers to prosecutors and to his former employer, the University of Michigan. He reserved judgment on a subset of legal and other documents that may be protected, he said.
Martoma’s trial is expected to last approximately three weeks.
The case is U.S. v. Martoma, U.S. District Court for the Southern District of New York, No. 12-cr-973.
Reporting by Joseph Ax; Editing by Jeffrey Benkoe