SAC’s Martoma Faces 15 Years Under Sentencing Guidelines

By Bob Van Voris

Photographer: Peter Foley/Bloomberg

Mathew Martoma, a former portfolio manager with SAC Capital Advisors LP, arrives at... Read More

Former SAC Capital Advisors LP portfolio manager Mathew Martoma faces nonbinding federal guidelines that call for him to get more than 15 years in prison when he’s sentenced today in what prosecutors called the most lucrative insider-trading scheme ever.
U.S. District Judge Paul Gardephe in Manhattan ruled that the amount of gain to SAC from Martoma’s insider trading in shares of Elan Corp. and Wyeth LLC ranged from $200 million to $400 million. As a result, the guidelines call for Gardephe to give Martoma from 15 2/3 to almost 20 years in prison.
Prosecutors claimed Martoma benefited Steven Cohen’s hedge-fund firm by $275 million in illicit profits and avoided losses. Martoma got a
bonus of almost $9.4 million as a result of the trades.
A 15-year term would be the longest imposed for insider trading. U.S. probation authorities have recommended that Martoma, 40, get eight years in prison. Prosecutors have asked the judge to impose a higher sentence.
Gardephe, who is required under the law to calculate and consider the sentencing guideline range, isn’t required to follow it in his sentencing decision. Martoma, who is married with three young children, has asked the court for leniency.
The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).