U.S. appeals court upholds Indian-American’s insider trading conviction

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Mathew Martoma

Martoma, a former portfolio manager at the hedge fund SAC Capital, who was convicted on insider trading charges,and sentenced to 9 years in prison in 2014.

By a split 2 to 1 decision, the 2nd Circuit Court of Appeals rejected Martoma’s claim that evidence of guilt was inadequate and that the jury had been given improper instructions during the trial.

The case was one of several alleged white-collar crimes investigated and brought to trial by former U.S. Attorney for the Southern District of New York Preet Bharara, often referred to as the ‘Sheriff of Wall Street.” According to a CNN report in February, 2014, Martoma was the 79th person to be convicted of insider trading by Bharara’s office between 2010 and 2014.

Acting U.S. Attorney for the Southern District Joon Kim, who has replaced Bharara in the interim, said in a statement on the appeals court decision, that his department was gratified by the Second Circuit’s affirmation of Martoma’s conviction.

“The strength of our securities markets rests on their integrity and fairness.  And the successful prosecution of those who cheat by trading on illegally obtained inside information, as Martoma did to the tune of over $275 million, is critical to maintaining that integrity and fairness in our markets,” Kim said in the statement circulated to media.

A divided federal appeals court on Wednesday upheld the insider trading conviction of Mathew Martoma, a  former SAC Capital Advisors LP portfolio manager, rejecting his claims that there was inadequate evidence of guilt and that the jury instructions were defective. .

Martoma worked in SAC’s Intrinsic Investors unit, and was convicted of receiving tips in 2008,considered to be confidential, from a Michigan doctor related to an Alzheimer’s drug trial. Investigators said those trades fetched some $275 million gains for SAC.

Martoma was convicted in February 2014, after several of his colleagues at SAC pleaded guilty to insider trading, Reuters reported.

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