NEW YORK (Reuters) - Mathew Martoma, a
former SAC Capital Advisors portfolio manager convicted of insider
trading, should be sentenced to a "substantial" term of prison beyond
the eight years recommended by probation officers, U.S. prosecutors
argued Friday.
In court papers filed in New York federal court, prosecutors urged
U.S. District Judge Paul Gardephe to impose a prison term for
Martoma "toward the high end" of sentences imposed in insider
trading cases.
"If the crime of insider trading is a serious one, Martoma stands
before the court as one of the very worst offenders," prosecutors
wrote.
The court's probation department has recommended Martoma be
sentenced to eight years in prison. It had calculated that under the
federal sentencing guidelines, Martoma would face between 15 years,
8 months and 19 years, 7 months in prison.
Martoma's lawyers had called those lengths of time "outrageous" and
"irrational." Prosecutors on Friday said they also did not oppose a
sentence below that range.
But prosecutors under Manhattan U.S. Attorney Preet Bharara told
Gardephe he should impose a "substantial" sentence in light of the
seriousness of the conduct and the "unprecedented" ill-gotten gains.
Richard Strassberg, a lawyer for Martoma, declined comment.
Martoma, 40, faces sentencing on July 28 after a jury found him
guilty in February on conspiracy and securities fraud charges for
trading on confidential tips about a clinical trial for an
Alzheimer's drug.
Prosecutors said the scheme enabled SAC to make $275 million in July
2008 from trades in Elan Corp and Wyeth, a record amount in U.S.
insider trading cases.
Elan was acquired last year by Perrigo Company Plc, while Wyeth is
now owned by Pfizer Inc.
Martoma is one of eight SAC employees to have been convicted on
insider trading charges. SAC, founded by billionaire Steven A.
Cohen, pleaded guilty to fraud and agreed to pay $1.8 billion in
criminal and civil settlements.
Cohen, 58, has not been criminally charged. He has renamed his
Stamford, Connecticut-based firm Point72 Asset Management, and
shifted its focus to managing his fortune.
On Friday, SAC Capital reached an agreement with the U.S. Securities
and Exchange Commission to no longer be an investment adviser,
following the firm's guilty plea.
Cohen continues to face a SEC administrative action for failing to
supervise SAC employees who engaged in insider trading, including
Martoma. He denies wrongdoing.
The longest U.S. insider trading sentence is a 12-year term given to
lawyer Matthew Kluger for a $37 million scheme for which he pleaded
guilty in 2011.
The case is U.S. v. Martoma, U.S. District Court for the Southern
District of New York, 12-cr-00973.
(Reporting by Nate Raymond in New York; Editing by Bernard Orr)
