New York (HedgeCo.Net) – Former SAC Capital trader Mathew Martoma has been sentenced to nine years in prison for his part in a scheme involving an Alzheimer’s Disease drug trial to make his hedge fund approximately $276 million.
“I cannot and will not ignore that the gain is hundreds of millions of dollars more than ever seen in an insider trading prosecution.” New York Judge Gardephe said during the sentencing Monday. The judge also ordered that Martoma forfeit $9.3 million, which was a bonus he received for his actions at the time.
Martoma was found guilty in February of this year of insider trading in what is being called the most lucrative hedge fund insider trading cases ever prosecuted.
“As the jury unanimously found, Mathew Martoma cultivated and purchased the confidence of doctors with secret knowledge of an experimental Alzheimer’s drug, and used it to engage in illegal insider trading.” Preet Bharara said in a statement following the conviction in Febuary.
“Today’s sentence of a lengthy prison term is well-suited to the audacity of the illegal trading in this case. The long and short of Mathew Martoma’s trading is that he traded his liberty, his name and his time with his family for what in the end is nothing,” Bharara said yesterfay.
Martoma, a former portfolio manager for a division of a group of SAC-affiliated hedge funds, allegedly used inside information that he received from a doctor who served as an adviser to Elan Corporation PLC on the clinical trial of an Alzheimer’s Disease drug to make profits and avoid losses for the hedge fund. Martoma and his then-employer, SAC Capital Advisors, liquidated holdings in two companies after receiving insider information, the prosecution said.
Martoma was arrested at his home in Boca Raton, Florida, and made an initial appearance in federal court in West Palm Beach, Florida.
Alex Akesson
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