Newspaper article International Herald Tribune

Bail Granted in SAC Insider Trading Case

Newspaper article International Herald Tribune

Bail Granted in SAC Insider Trading Case

Article excerpt

Prosecutors have accused Mathew Martoma of using secret information about a drug trial to help SAC Capital Advisors gain profits and avoid losses totaling $276 million.

Mathew Martoma, the former SAC Capital Advisors employee at the center of what the U.S. government calls the most lucrative insider trading case ever brought, has appeared in U.S. District Court in New York to face the charges against him.

U.S. prosecutors have accused Mr. Martoma, 38, of having used secret information about a drug trial to help SAC gain profits and avoid losses totaling $276 million. Three former SAC employees have already pleaded guilty in connection with unrelated illegal trading at the firm, but Mr. Martoma's case is the first time that the government has aimed to connect questionable trades to Steven A. Cohen, the billionaire founder of SAC, one of the world's most powerful hedge funds.

Mr. Cohen has not been accused of wrongdoing and, through his spokesman, has said that he acted appropriately at all times. Prosecutors have not said that Mr. Cohen was in possession of any inside information related to Mr. Martoma's trades.

Mr. Martoma appeared before Magistrate Judge James L. Cott. Square-jawed, lean and with close-cropped hair, Mr. Martoma sat at a table flanked by his lawyers, with his wife, Rosemary, seated in the spectators' gallery. Judge Cott informed Mr. Martoma of his rights as a criminal defendant and freed him on $5 million bail. His next court appearance is scheduled for Dec. 26.

F.B.I. agents arrested Mr. Martoma at his home in Boca Raton, Florida, on Nov. 20 at 6:30 a.m. The government charged him via a criminal complaint instead of using a grand jury indictment, a tactic that suggests prosecutors were trying to secure Mr. Martoma's cooperation in its investigation of Mr. Cohen and SAC.

Charles A. Stillman, Mr. Martoma's lawyer, declined to comment after the hearing. Last week, he said that he expected his client to be exonerated.

The government says that Mr. …

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