Martoma Sentenced to Nine Years in Prison
Former SAC Capital Hedge-Fund Manager Also Ordered to Forfeit $9.38 Million
Mathew Martoma, center, and his wife arrive at federal court for a sentencing hearing in New York on Monday. Photo: Bloomberg
By CHRISTOPHER M. MATTHEWS
A federal judge sentenced Mathew Martoma to nine years in prison Monday, handing the former SAC Capital Advisors LP portfolio manager a stiff prison term in line with climbing punishments for insider trading.
The sentence gives the government another big win in its multiyear investigation into SAC and its billionaire founder, Steven A. Cohen.
Mr. Martoma, 40 years old, was convicted of taking part in what prosecutors say was one of the largest insider-trading schemes ever—illegal trades on two pharmaceutical companies that helped SAC and its traders book profits and avoid losses worth a total of $275 million.
Under federal guidelines, the profit or loss caused by a fraud plays a prominent role in sentencing recommendations. Because of the size of the scheme, Mr. Martoma faced as many as 20 years in prison under recommendations from the Manhattan federal court's probation office. Prosecutors argued that Mr. Martoma deserved a sentence of more than eight years in prison.
U.S. District Judge Paul Gardephe, who handed down the sentence after considering various factors, also ordered Mr. Martoma to forfeit $9.38 million.
Mr. Martoma is the eighth SAC employee convicted of insider trading. Most have pleaded guilty.
SAC itself pleaded guilty in November to criminal insider-trading charges and agreed to pay about $1.2 billion in new penalties. As part of the settlement, the firm said it would stop managing outside money. SAC has since changed its name to Point72 Asset Management.