By Bernard Vaughan
NEW YORK, Jan 3 (Reuters) - 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 federal prosecutors.
"I plead not guilty, your honor," said Martoma, speaking in
a calm voice, to each of three counts that U.S. District Judge
Paul Gardephe in Manhattan read to him on Thursday.
Martoma was indicted last month on charges of conspiracy to
commit securities fraud and 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 U.S. 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," Stillman said.
At the hearing, Assistant U.S. 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 in the case.
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 U.S.
Securities and Exchange Commission filed against him, a source
previously told Reuters.
The next court hearing in Martoma's case was set for March
5.
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