A former SAC Capital Advisors portfolio manager was convicted today of helping his company earn more than a quarter billion dollars illegally through trades based on secrets about the testing of a potential breakthrough Alzheimer's drug.
The verdict capped a three-week trial that featured testimony from two prominent doctors who confessed spilling secrets to Mathew Martoma during lucrative consultations with financiers.
Martoma sat expressionless as the jury forewoman announced he had been found guilty of two counts of securities fraud and conspiracy to commit securities fraud. Tears streamed down the face of his wife, who sat with her hands folded on her yellow dress.
The trial also contained frequent mentions of SAC Capital's billionaire founder, Steven A Cohen Defence lawyer Richard Strassberg said in his closing argument on Monday that Cohen was the real target of investigators. He said his client was victimized by the testimony of doctors who traded their credibility for plea deals that left them beholden to the government.
He said the doctors learned "just how frighteningly scary it can be if you get in the way of a government investigation that's targeting someone like Steve Cohen." Sidney Gilman, an 81-year-old former professor of neurology at the University of Michigan Medical School, testified that he gave Martoma the secret results of the drug trial sponsored by drug makers Elan Corp. And Wyeth nearly two weeks before they were publicly announced.
He said he was charmed by Martoma, 39, who seemed more knowledgeable about his work than hundreds of others in the financial community who paid Gilman more than $1 million over several years for consultations.
Gilman said he could not recall giving similar information to anyone else, though he conceded that he "perhaps unintentionally ... May have slipped here and there."
Assistant US Attorney Arlo Devlin-Brown told the jury that after the doctor showed Martoma the test results in one of 43 consultations the pair had, Martoma sent Cohen an early morning email asking: "Is there a good time to catch up with you this morning? It's important." A half hour later, they spoke for 20 minutes on the phone.
