A New York court has sentenced Indian-American hedge fund manager Mathew Martoma to nine years in prison and ordered forfeiture of $9.38 million bonus for his role in one of the biggest insider trading schemes to be unearthed by the US authorities.
The 40-year-old Martoma, a former portfolio manager of SAC Capital Advisors, was convicted in February of one count of conspiracy to commit securities fraud and two counts of securities fraud after a month-long jury trial.
He had been convicted for collecting confidential information about a drug trial for Alzheimer’s disease from two doctors and making profits and avoiding losses of $275 million for SAC Capital.
“I cannot and will not ignore that the amount of the gain was in the hundreds of millions of dollars,” US District Judge Paul Gardephe said as he handed down the tough sentence, adding: “There was nothing accidental about Martoma’s conduct or the gain realised.”
Martoma will appeal the conviction, said his attorney Richard Strassberg. “Mathew Martoma and his family are devastated by the outcome,” he said in a statement. Martoma’s mother, lizzie Thomas, said his son had been framed.
The conviction and stiff sentence is another success for US Attorney Preet Bharara, who has waged a relentless battle against insider trading that has netted for him a host of prize scalps, including the reputed Indian-American business honcho Rajat Gupta, currently serving a two-year jail term.
“Today’s sentence of a lengthy prison term is well-suited to the audacity of the illegal trading in this case. The long and short of Mathew Martoma’s trading is that he traded his liberty, his name and his time with his family for what in the end is nothing,” Bharara said in a statement.
Wife Rosemary and parents were present in the Manhattan federal court as Martoma, a father of three, received the sentence, which also includes three years of supervised release on completion of the nine years in jail.