JURY selection began yesterday in the trial of Mathew Martoma, a former portfolio manager at Steven A Cohen’s SAC Capital Advisors hedge fund, who is accused of engaging in the most lucrative insider trading scheme in US history.
Court officials handed questionnaires to 80 potential jurors to determine their suitability to sit for more than three weeks in the high-profile trial in a federal court in New York.
Potential jurors were asked, among other things, about the extent to which they had read about Martoma’s case or heard of Cohen and SAC, and whether they had “strong feelings” against traders, stockbrokers and hedge funds.
US District Judge Paul Gardephe instructed the potential jurors to steer clear of media reports about the case and SAC Capital while they are under consideration.
Martoma, in a dark suit and blue tie, sat at a table with his lawyers. He is accused of arranging trades in Elan Corp and Wyeth based on confidential information supplied by two doctors involved in a clinical trial for an Alzheimer’s drug. Wyeth is now a unit of Pfizer.
Thanks to the trades, SAC Capital made profits and avoided losses of $276m, according to an indictment against Martoma, which prosecutors have said is the most money ever made in a US case brought over insider trading. Martoma, 39, has pleaded not guilty to the three conspiracy and securities fraud charges in the indictment. He is one of eight current or former SAC employees to face criminal charges amid a crackdown by US authorities against insider trading.
SAC Capital, once a $14bn hedge fund, agreed in November to pay $1.2bn and plead guilty to fraud charges stemming from insider trading by its employees.
Cohen, 57, faces an administrative action by the SEC seeking to bar him from the financial industry for failing to supervise Martoma and Steinberg. Cohen has not been criminally charged and denies wrongdoing.
City A.M. Reporter