In­dian-ori­gin fund man­ager charged in in­sider trad­ing case

Hindustan Times (Patna) - - NATION - Reuters

NEW YORK: Mathew Mar­toma, a former port­fo­lio man­ager at hedge fund SAC Cap­i­tal Man­age­ment, pleaded not guilty to fraud charges stem­ming from a $276-mil­lion in­sider-trad­ing case brought by US fed­eral pros­e­cu­tors.

“I plead not guilty your honor,” said Mar­toma, speak­ing in a calm voice to each of three counts that US District Judge Paul Garde­phe in Man­hat­tan read to him on Thurs­day.

Mar­toma was in­dicted last month on charges of con­spir­acy to com­mit se­cu­ri­ties fraud .

He is ac­cused of help­ing CR In­trin­sic In­vestors, one of the funds run by in­vest­ment man­ager Steven A Co­hen’s SAC Cap­i­tal make il­le­gal trades in Elan Corp Plc and Wyeth, now part of Pfizer Inc. The trades were made in the sum­mer of 2008 based on il­licit tips pros­e­cu­tors say Mar­toma re­ceived from a doc­tor, ac­cord­ing to the in­dict­ment.The case is the lat­est in the US government’s wide-rang­ing in­ves­ti­ga­tion of sus­pi­cious trad­ing among hedge fund traders, port­fo­lio man­agers and con­sul­tants. The probes have pro­duced more than 50 con­vic­tions with many of the de­fen­dants plead­ing guilty in­stead of go­ing to trial.

When asked af­ter the hear­ing if he was ne­go­ti­at­ing a plea agree­ment with pros­e­cu­tors, Mar­toma’s lawyer Charles Still­man said “the an­swer is no.”

“Mathew Mar­toma is an in­no­cent man,” said Still­man.

At the hear­ing, as­sis­tant US at­tor­ney Arlo Devlin-Brown said ev­i­dence in the case will in­clude trad­ing records, phone records and e-mails re­gard­ing the trades and will in­clude “vo­lu­mi­nous dis­cov­ery” from the hedge fund.

Mar­toma is the sev­enth former em­ployee of Co­hen’s to be charged or im­pli­cated in an in­sider-trad­ing case while work­ing at SAC Cap­i­tal. Some former SAC Cap­i­tal em­ploy­ees have been charged with in­sider trad­ing af­ter leav­ing the firm and while work­ing at other funds.Co­hen has not been charged with wrong­do­ing.

The crim­i­nal com­plaint against Mar­toma is the first to re­fer to Co­hen who ap­pears in it as “hedge fund owner” and “hedge fund man­ager A” in a cor­re­spond­ing civil com­plaint the US Se­cu­ri­ties and Ex­change Com­mis­sion filed against him, a source had ear­lier said.

The next court hear­ing in the case was set for March 5.

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