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Jing Chen has been eVestment’s hedge fund industry news reporter since 2011. To submit industry-related press releases or request feature ideas please contact her at editor@evestment.com

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SAC Capital's Martoma Faces Up to 20 Years in Prison

Feb 09, 2014
Jing Chen

Mathew Martoma, the former SAC Capital Advisors portfolio manager who was convicted of insider trading last week, could face up to 20 years in prison.

Bloomberg Businessweek reported that Martoma was convicted of two counts of securities fraud, which carries a maximum 20-year term, and one count of conspiracy, which has a maximum five-year term. His sentencing is scheduled for June 10.

The guilty verdict is the latest setback for Connecticut-based SAC Capital, which itself pleaded guilty to securities fraud charges in November and agreed to pay a $1.2 billion penalty.

Martoma, who is the eighth person who once worked at Steve Cohen’s SAC Capital to either be convicted or plead guilty to insider trading, was charged by federal authorities last November for allegedly making over $250 million for SAC Capital using insider information he received regarding an Alzheimer disease drug trial. Martoma, who earned a $9.3 million bonus connected to the trades, chose to risk a trial after rejecting U.S. offers of a deal for cooperation.

SAC, which managed about $14 billion in total assets under management as of July 1, is currently in the midst of transitioning into a family office as part of its insider trading settlement.

 

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