New York, Feb 7: Manhattan’s Indian-American US Attorney Preet Bharara has struck again with the conviction of an Indian-American portfolio manager, giving him an enviable 79-0 record in his four-year long crackdown on insider-trading on Wall Street.
A jury of seven women and five men Thursday found former SAC Capital Advisor portfolio manager Mathew Martoma, 39, guilty on one count of conspiracy and two counts of securities fraud. Martoma could end up with a 15-year sentence, given that he was involved in what the prosecutors said was the most lucrative insider-trading crime ever in the US.
Martoma’s illegal tips earned SAC $275 million in profits and avoided losses from inside information on trials of an experimental Alzheimer’s drug developed by Elan and Wyeth. He got the tips from Dr. Sidney Gilman, who served as the government’s star witness.
“Martoma bought the answer sheet before the exam – more than once – netting a quarter billion dollars in profits and losses avoided for SAC, as well as a $9 million bonus for him,” as Bharara, nicknamed by Time magazine as the “Sheriff of Wall Street” put it. “In the short run, cheating may have been profitable for Martoma, but in the end, it made him a convicted felon, and likely will result in the forfeiture of his illegal windfall and the loss of his liberty,” he said.
Martoma, dressed in a blue suit and a blue tie showed no emotion as the verdict was read. But tears streamed down the face of his wife, Rosemary, who was dressed in a bright yellow sundress. Martoma, the son of Indian immigrants was born Ajai Mathew Mariamdani Thomas, but changed his name after being expelled from Harvard Law School for forging his transcript. He then enrolled in Stanford Business School and graduated with an MBA in 2003.
After a stint at a smaller hedge fund, Sirios Capital Management in Boston, Martoma joined SAC Capital Advisors, the hedge fund run by the billionaire Steven A. Cohen. Martoma becomes the 79th person convicted of insider trading after trial or by guilty plea in Bharara’s jurisdition in the last four years.
Of the 78 prior convictions, former Sri Lankan American hedge fund billionaire Raj Rajaratnam received a sentence of 11 years in Oct 2011 – the longest sentence in the insider-trading cases so far. Rajat Gupta, former Indian-American managing director of McKinsey & Company was sentenced in October 2012 to two years in prison and fined $5 million for giving tips to Rajaratnam. He remains free on appeal. IANS