Jury hands out guilty verdict in insider trading trial of ex-SAC Capital trader Martoma

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Contrary to an earlier speculation by lawyers quoted by the New York Times' the DealBook, the former SAC Capital Partners portfolio manager Mathew Martoma was found guilty on Thursday for engaging in insider trading. Prosecutors have said that Martoma participated in what was deemed to be the most profitable insider trading scheme in the US. Martoma will be serving up to 45 years in jail.

Reuters said Martoma was found guilty of all three securities fraud and conspiracy charges by a federal jury in Manhattan. The particular scheme allowed SAC Capital to avoid losses on a $700 million investment in two pharmaceutical firms and gained $275 million in the process. The news agency noted that Martoma's guilty verdict would be the eight insider trading conviction of a former or current employee of the hedge fund run by billionaire Steven A. Cohen.

Martoma and his wife and his defense team was seen walking away from the courthouse stone-faced as photographers took pictures. Martoma's camp refused to answer questions of news reporters who were on the scene, Reuters said. Martoma's lawyer, Richard Strassberg, released a statement through a spokesman, "We are very disappointed and we plan to appeal."

In a statement, US Attorney Preet Bharara said, "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."

Reuters said the latest conviction signaled the continuing winning streak of US prosecutors in New York, as they go for guilty pleas or verdicts against 79 Wall Street professionals since October 2009 as part of their efforts to crack down insider trading. It also, albeit small, but significant victory as federal prosecutors attempt to chip away Cohen's empire. Although Cohen was not charged with a crime has fervently denied any wrongdoing, the course of Martoma's trial revealed information that Cohen might have a hand in the firm's insider trading practices. Prosecutors claimed during the trial that the Martoma traded using accounts controlled by the hedge fund manager, and that the former had a 20-minute phone conversation with Cohen after receiving confidential information to be used in illegal trades, Reuters noted.

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Mathew Martoma, Steve Cohen

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