Former SAC Trader Found Guilty of Insider Trading
Source: NY TIMES
A federal jury in Manhattan convicted Mathew Martoma on Thursday on insider trading charges in what may be the last criminal case to emerge from a decade-long investigation of Steven A. Cohen and his SAC Capital Advisors hedge fund.
The jury of seven women and five men found Mr. Martoma, a former SAC portfolio manager, guilty of seeking out confidential information related to a clinical trial for an experimental Alzheimer’s drug. The inside information — provided mainly by a doctor familiar with the results of the clinical trial who was the government’s main witness — helped SAC avoid losses and generate profits totaling $275 million in July 2008.
The 39-year-old former trader, who is married and has three young children, is expected to face a prison sentence of seven to 10 years.
The guilty verdict is the latest setback for Mr. Cohen and his 22-year-old firm, which itself pleaded guilty to securities fraud charges in November and agreed to pay a $1.2 billion penalty. Mr. Cohen, 57, has not been charged with any criminal wrongdoing and it is unclear whether he ever will be. But the verdict comes as Mr. Cohen is moving forward with plans to reconfigure his firm into a family office that will mainly manage his $9 billion in personal wealth.
Read more: http://dealbook.nytimes.com/2014/02/06/former-sac-trader-found-guilty-of-insider-trading/?hp
Head funders get prosecuted because they are small enough to jail.
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