SAC Capitol Advisors may have settled for $1.8 billion total with the federal government in what the government says is the largest insider trading case in U.S. history, but the criminal case against SAC’s leaders is seeing a few more bumps as prosecutors try to find a direct link between founder Steven Cohen and insider trading.
Ex-SAC portfolio manager Mathew Martoma has refused to testify against Cohen and will now face his own trial in the government’s probe. Prosecutors saw Martoma as one of the few who could provide a definitive link between Cohen and the crimes in question.
“I think Martoma was the likeliest link to Cohen,” said Glenn Gitomer, a partner with the law firm McCausland Keen & Buckman, told Bloomberg. “Martoma’s the one with the 20-minute phone call. Depending on what happened, that either gets them there or doesn’t.”
Martoma’s trial will begin with jury selection on Jan. 6. If convicted, Martoma faces a maximum sentence of 45 years for two counts of securities fraud and one count of conspiracy. Martoma has pleaded not guilty to the charges against him.
Within the case, prosecutors against Martoma are expected to call two doctors, Sid Gilman, and Joel Ross, who allegedly provided Martoma with inside information about the results of drug tests. In exchange for their testimony, Gilman and Ross have signed non-disclosure agreements.
The government has been aggressive in its pursuit of action against ex-SAC officials in the case, with U.S. Attorney Preet Bharara’s office gaining 78 convictions so far in the case, most of which on guilty pleas. Those guilty pleas have resulted in multiple witnesses against the bigger names in the government’s pursuit, such as former fund manager Michael Steinberg.
As a result of the $1.8 billion penalty, SAC Capitol Advisors shut down in early November 2013. In shutting down, SAC agreed to plead guilty to each count for which they were charged in an indictment unsealed in July 2013.
For more on InsideCounsel’s ongoing coverage of the SAC case, check out these articles: