Mathew Martoma, a former portfolio manager at hedge fund SAC Capital Management, pleaded not guilty to fraud charges stemming from a $276-million insider-trading case brought by US federal prosecutors.
“I plead not guilty your honor,” said Martoma, speaking in a calm voice to each of three counts that US District Judge Paul Gardephe in Manhattan read to him on Thursday.
Martoma was indicted last month on charges of conspiracy to commit securities fraud .
He is accused of helping CR Intrinsic Investors, one of the funds run by investment manager Steven A Cohen’s SAC Capital make illegal trades in Elan Corp Plc and Wyeth, now part of Pfizer Inc. The trades were made in the summer of 2008 based on illicit tips prosecutors say Martoma received from a doctor, according to the indictment.
The case is the latest in the US government’s wide-ranging investigation of suspicious trading among hedge fund traders, portfolio managers and consultants. The probes have produced more than 50 convictions with many of the defendants pleading guilty instead of going to trial.
When asked after the hearing if he was negotiating a plea agreement with prosecutors, Martoma’s lawyer Charles Stillman said “the answer is no.”
“Mathew Martoma is an innocent man,” said Stillman.
At the hearing, assistant US attorney Arlo Devlin-Brown said evidence in the case will include trading records, phone records and e-mails regarding the trades and will include “voluminous discovery” from the hedge fund.
Martoma is the seventh former employee of Cohen’s to be charged or implicated in an insider-trading case while working at SAC Capital. Some former SAC Capital employees have been charged with insider trading after leaving the firm and while working at other funds.
Cohen has not been charged with wrongdoing.
The criminal complaint against Martoma is the first to refer to Cohen who appears in it as “hedge fund owner” and “hedge fund manager A” in a corresponding civil complaint the US Securities and Exchange Commission filed against him, a source had earlier said.
The next court hearing in the case was set for March 5.