Insider trading trial of SAC's Martoma delayed until January
NEW YORK, Sept 24 (Reuters) - A federal judge on Tuesday pushed back the insider trading trial of former SAC Capital Advisors portfolio manager Mathew Martoma to Jan. 6.
U.S. District Judge Paul Gardephe delayed the trial, originally scheduled for Nov. 4, at the request of Martoma's lawyer, Richard Strassberg, who is taking part in another trial starting this week.
Prosecutors charged Martoma last November with insider trading in shares of the drug companies Elan and Wyeth, which is now part of Pfizer. The companies were collaborating on a new drug to treat Alzheimer's Disease.
Initially, prosecutors alleged that a doctor, identified in a corresponding case brought by the U.S. Securities and Exchange Commission as neurologist Sidney Gilman, formed a close relationship with Martoma and shared non-public information with him while supervising a clinical trial of the new drug. Gilman is cooperating with the investigation and agreed to pay a $186,781 disgorgement.
Prosecutors have since expanded the case to say that Martoma not only capitalized on Gilman's information but also sought other insider sources through expert networking firms. They also say a second doctor gave Martoma inside information.
Strassberg, Martoma's lawyer, is also representing Bank of America Corp's Countrywide unit in a trial over allegations that it defrauded Fannie Mae and Freddie Mac with shoddy home loans.
Because of proceedings in the Countrywide case, Strassberg arrived, out of breath, in Gardephe's crowded courtroom an hour after the scheduled 12:30 p.m. start of a hearing.
"Yes, I have arrived," Strassberg said, when the court reporter asked if he was present.
Gardephe took the bench a few minutes later, and Strassberg informed him that he had to return to the courtroom of U.S. District Judge Jed Rakoff, who is presiding over the Countrywide case, by 2 p.m.
After Gardephe set Jan. 6 for the start of the Martoma trial, Strassberg requested the trial be pushed back to Jan. 13, saying it would be difficult to prepare witnesses over the holidays. Arlo Devlin-Brown, an assistant U.S. attorney prosecuting the case, said he would have no problem with that.
"I personally appreciate this," Strassberg told Gardephe.
Gardephe said he would consider it if his schedule permits.
"I have my own trial calendar," Gardephe said.
Martoma is one of nine one-time employees of billionaire Steven A. Cohen's hedge fund to be named in the government's broad investigation of insider trading.
He was to be the first to face trial. Now, former SAC fund manager Michael Steinberg will be the first to face trial, scheduled to start Nov. 18. Antonia Apps, the assistant U.S. attorney prosecuting that case, watched the Martoma hearing Tuesday from the courtroom gallery.
SAC Capital itself was indicted in July on insider trading charges. The firm has pleaded not guilty. Cohen has not been charged.
The Martoma case is U.S. v. Martoma, U.S. District Court, Southern District of New York, No. 12-cr-00973.