Former SAC Capital Advisors LP portfolio manager Mathew Martoma was sentenced to nine years in prison for the most lucrative insider-trading scheme in history.
The sentencing may be the government's last hurrah in the investigation of billionaire Steven A. Cohen.
Martoma, 40, convicted of making $275 million for SAC by using illegal tips to trade in Elan Corp. and Wyeth LLC, had rejected government offers of leniency in exchange for his cooperation in the probe of Cohen and his Stamford, Connecticut-based hedge fund.
Martoma planned "one big score that would provide him with financial security," U.S. District Judge Paul Gardephe said at yesterday's sentencing in Manhattan. "His plan worked, but now he will have to deal with the fallout."
Martoma was the last of seven former analysts and fund managers from the firm to be convicted, closing a chapter in the pursuit of Cohen by Manhattan U.S. Attorney Preet Bharara.
The SAC investigation was part of a larger government crackdown on insider trading at hedge funds including Galleon Group LLC, co-founded by Raj Rajaratnam.
Since August 2009, Bharara's office has charged 89 people with insider trading. Of that number, 81 were convicted, most through guilty pleas. Only one defendant, Rajaratnam's brother, Rengan Rajaratnam, was found not guilty at trial. The remaining seven cases are pending.
"There was nothing accidental about Martoma's conduct or about the gain," Gardephe said yesterday. "The conduct was well-planned, and Mr. Martoma knew the amount of avoided losses or profits were likely to be staggering."
Martoma, who is married with three young children, asked for less prison time. He didn't speak in court and left the courthouse without comment.
He was found guilty in February of receiving illegal tips from two doctors overseeing clinical tests on bapineuzumab, an Alzheimer's disease drug, to make trades for the benefit of SAC Capital.
Cohen, 58, who hasn't been charged with a crime, has denied all wrongdoing. He is the subject of a U.S. Securities and Exchange Commission administrative proceeding in which he is accused of failing to supervise the hedge fund's employees, including Martoma.