Indian-origin fund manager in the United States sentenced to 9 years in jail
An Indian-origin portfolio manager has been sentenced to 9 years in jail for his role in one of the “most lucrative” insider trading schemes ever in the United States involving a “staggering” $276 million and ordered to forfeit a $9.3 million bonus he earned through it.
Mathew Martoma, 40, was sentenced in federal court here yesterday by United States District Judge Paul Gardephe, who ordered that he also forfeit his interests in his Florida home and several bank accounts as he described Martoma’s conduct as “deeply corrosive to our financial markets,” generating cynicism among investors.
The 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.”
While handing down the sentence, Gardephe 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.”
Gardephe also said “the sums here are staggering in size”.
Martoma, a portfolio manager of CR Intrinsic Investors, a division of hedge fundbehemoth 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 275 million dollars 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.
“Today’s sentence of a lengthy prison term is well-suited to the audacity of the Illegaltrading in this case. 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, sat silently throughout the hearing in Manhattan federal court as Gardephe handed down the sentence, which also includes three years of supervised release following Martoma’s completion of this sentence.
He was accompanied by his wife, Rosemary and some of his family members.