File photo of Mathew Martoma
An Indian-origin portfolio manager, sentenced to nine years for his role in the most lucrative insider trading scheme in US history, has lost his bid to stay out of jail after a judge ruled that evidence against him was "overwhelming", weeks before he has to start his prison term.
Mathew Martoma, 40, was sentenced in federal court last month by US District Judge Paul Gardephe for his role as the "central figure" in the most lucrative insider trading scheme ever charged involving 275 million dollars in illegal profits and avoided losses.
Martoma was also ordered to forfeit a USD 9.3 million bonus he earned through the insider trading as well as his interests in his Florida home and several bank accounts.
Martoma, who was ordered to surrender on November 10, had earlier this month moved the court for bail pending appeal saying his appeal will raise "several other close questions including that evidence was improperly excluded and his sentence was both procedurally and substantively unreasonable."
He had also requested that the court extend his surrender date to December 2 to allow him to file a motion for bail pending appeal in Court of Appeals.
In an order on Tuesday, Gardephe denied Martoma's motion saying the "evidence of his guilt at trial was overwhelming".
"None of Martoma's arguments regarding the sufficiency of the evidence or legal error at trial are persuasive," the judge said, adding that Martoma has not articulated any basis for finding that his sentence was procedurally or substantively unreasonable.
"Because Martoma has not demonstrated that his appeal is likely to raise a substantial question of law or fact, his motion for bail pending appeal, or alternatively for an extension of his surrender date, is denied," Gardephe said.
Martoma's prison sentence, among the longest handed down for insider trading, was in line with what Manhattan's top federal prosecutor Preet Bharara had sought ahead of the hearing.
The India-born federal attorney had described Martoma's role in the insider trading scheme as "central" and sought a prison term of over eight years along with forfeiture of his bonus saying the sentence should be "commensurate with the seriousness of the offense conduct and the unprecedented ill-gotten gains that it generated."
In handing down the sentence, Gardephe had said "I cannot and will not ignore that the gain is hundreds of millions of dollars more than ever seen in an insider trading prosecution" adding that "there was nothing accidental about Martoma's conduct or the gain realized.
"Martoma, a portfolio manager of CR Intrinsic Investors, a division of hedge fund behemoth SAC Capital, was convicted in February this year for collecting confidential information about a high-profile Alzheimer's drug trial from two doctors and making profits and avoiding losses of USD 275 million for SAC Capital.
After the hearing, Bharara said in a statement that Martoma's nine-year prison sentence and financial penalties will strip him of the ill-gotten millions in proceeds of his crime.
"The long and short of Mathew Martoma's trading is that he traded his liberty, his name and his time with his family for what in the end is nothing," Bharara added.
Martoma, who had changed his name from Ajai Mathew Thomas, was also sentenced to three years of supervised release following the completion of his sentence.
Days after beginning his employment at SAC Capital, Martoma began searching for doctors who would be willing to provide him access to confidential information about an Alzheimer's disease drug trial conducted by Elan Pharmaceuticals and Wyeth Corporation.
SAC had last year pleaded guilty to insider trading and agreed to pay USD 1.8 billion to settle the criminal and civil charges against it.
It has since changed its name to Point72 Asset Management and now only manages the personal wealth of its founder Steven Cohen, who has not been criminally charged.
Martoma's guilty verdict added to the unbroken record of 78 convictions secured by Bharara in his crackdown on insider trading on Wall Street.
Martoma is the 79th person convicted of insider trading.
Fifty-eight of the 79 individuals have been sentenced, including prominent Wall Street executives like ex-Goldman director Rajat Gupta and billionaire hedge fund founder Raj Rajaratnam.